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We have been eagerly awaiting the latest information from Defra on changes to agricultural policy following Brexit and our withdrawal from the Common Agricultural Policy. On 30th November we received the England’s Agricultural Transition Plan which sets out Defra’s future plans.

The Plan covers the following:

Reductions to the Basic Payment Scheme (BPS)

We have previously reported Defra’s plans to phase out direct payments by 2028 but we only had details of the reductions which would be applied to BPS in 2021. We now have the reductions up to 2024 which will be as follows:

Payment Reduction 2021 Reduction 2022 Reduction 2023 Reduction 2024
Up to £30,000 5% 20% 35% 50%
£30,000 – £50,000 10% 25% 40% 55%
£50,000 – £150,000 20% 35% 50% 65%
Over £150,000 25% 40% 55% 70%

These reductions work in bands so if you receive a payment of £40,000 in 2020, in 2021 you would receive a 5% reduction on the first £30,000 and 10% on the remaining £10,000, leaving a payment of £37,500.

Beyond 2024 Defra intends to de-link the payment so that claimants no longer need to farm land in order to claim. The payment is likely to be based on a reference year(s). It is also intended that farmers looking to retire may be able to opt to take a lump sum payment in 2022 or 2023. Both of these elements will be subject to consultation in 2021.

Environmental Land Management (ELMs)

As a replacement to the current Environmental Stewardship (ES) the new scheme is intended to have three components:

  1. The Sustainable Farming Incentive (SFI) which is aimed at all farmers and will pay for land management above the regulatory baseline. There will be a pilot in 2021 with the scheme being more widely available in 2022. It will sit alongside BPS and existing ES schemes to start with.
  2. Local Nature Recovery which is aimed at habitat management and land use change targeted for the specific area.
  3. Landscape Recovery which will focus on long term land use change over large areas and so is likely to involve collaboration between farmers.

The full options for ELMs are not expected to be in place until later in 2024 and therefore until then Defra will continue to offer new Countryside Stewardship Schemes and extensions to existing agreements.

Productivity Schemes

Similarly to the existing Countryside Productivity Small Grant and Growth Programme Grants it is intended to offer grants for investment as follows:

There will also be grants available for investment in slurry storage, animal health and welfare, new entrants, and support organisations to offer advice to farmers to work through the transition period.

The aim is to enable farmers to improve their productivity to allow them to farm without subsidy when direct payments are phased out at the end of 2027.

Regulation

Defra is keen to highlight its desire to move away from the current system of enforcement by penalty to more of an advisory role. Inspections will be more targeted to high risk areas and activities and penalties applied proportionately according to risk.

Overall we are yet to see detail of the payment rates which will be offered under the new ELMs and it is likely that the success or failure of the schemes, in terms of uptake, will very much depend on this. However, it is good that we are now getting some clarity on Defra’s thinking to enable farming businesses to plan for the future with the twin focus of environmental improvement and increasing farm productivity.

If you require any further information or would like to discuss your specific circumstances, please contact Andrew Jenkinson, Partner & Rural Surveyor on  01280 818905 / 07967 964508 or email abrj@robinsonandhall.co.uk or Polly Sewell, Partner & Rural Surveyor on 01234 362933 / 07771 774749 or email pkts@robinsonandhall.co.uk