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Water ‘Of Growing Importance’

Farmers are beginning to receive paperwork from the Environment Agency (EA) to renew their agricultural water abstraction licenses.  Farmers should be aware of the potential implications of renewal.

  • Growers can expect licenses to become time limited.
  • Most renewed licenses will have a 12-year duration, but some will be shorter.
  • Most Licensees will have a clear presumption for renewal, but your valuable asset is not necessarily safe.

Action to be taken if your license is up for renewal:

  • Begin the process of renewing it at least three months prior to the expiry date, as this is the minimum time it will take for the renewal process to run.
  • If an extension is needed to cover any additional requirement, look to extend the license at this review.

Beware of potential cuts to licenses in catchments which are under stress or over-abstracted, these will be the areas in which licensed quantities will be most at risk of cuts.  As ever, underutilised licenses will be most at risk of cuts so continue the overriding policy of ‘Use it or Lose it’ when it comes to retaining abstraction licenses.  Optimal utilisation may still not protect your full license, if the catchment is seen to be suffering environmental damage and that will be interpreted by the EA.

Future protection of licenses may well rely on alternative means.  Not only will farmers need to demonstrate sustainable abstraction but they may also be required to swap part of their license to winter abstraction, which would involve the need to construct a winter storage reservoir.

Grants for such projects are not currently available, but Brown & Co have had a very high rate of success in obtaining grant funding for these projects in the past.  With the implementation of the current review of the CAP, new opportunities for grant funding are on the horizon.

Changes in Legislation

Following such a prolonged period of wet weather over the last few years, it may be difficult to consider water as a resource under stress. However, in the recent past, UK water resources have been under considerable pressure. In many catchments, not just in the South and East, there was little or no water available for abstraction during dry periods. Predictions indicate that the extremes experienced are likely to become more common in the future due to climate change.

The Water Act 2014 received Royal Assent on the 14th May 2014, the main purpose of the Water Act 2014 is to:

  • Reform the water industry to make it more innovative and responsive to customers and to increase the resilience of water supplies to natural hazards such as drought and floods. 
  • To bring forward measures to address the availability and affordability of insurance for those households at high flood risk and ensure a smooth transition to the free market over the longer term. 

The new powers given to the Environment Agency by the Act of greatest interest to the agricultural water sector include:

  • Provision of measures to restore the sustainable abstraction of water improving the way water resource management and drought planning are managed. 
  • Provision of powers to streamline the environmental permitting framework, which enables operators to apply for a single rather than multiple permits with the inclusion of licensing schemes for water abstraction and impounding, fish passes and flood defence consents. 
  • Reducing the bureaucracy relating to the governance of Internal Drainage Boards. 

Main Changes to affect farmers:

Abstraction Licence Reform Issues

  • Licences may become time limited
  • EA to be granted more power to control abstraction in time of drought
  • Over abstracted catchments will be subject to more scrutiny
  • Potential loss of ability to claim for compensation for loss of licensed quantity when it can be proved that abstraction is causing environmental damage.