Defra is making changes to the way farmers are paid for protecting the environment, after an EU audit of England’s agri-environment schemes.

The schemes fund green farming methods such as creating wildlife habitats and protecting the English landscape.

Although Defra’s schemes are effective and have been designed to make them attractive to farmers, the European Commission concluded that payments should only be made at certain points during the year instead of on a rolling basis throughout the year, to comply with EU law.

The Commission has asked Defra to establish an annual deadline for applications of 15 May. This may have an impact on when applications for new or renewed Stewardship agreements can be accepted, and on the start dates Defra is able to offer for these agreements.

The Commission has also asked for an annual cycle for payments, so that payments can only be made at particular times of the year. This would not apply to payments for capital works, which can continue to be made as at present. Agreements starting before 1 January 2007 may also be unaffected, but the Commission has yet to confirm this.

Talks between Defra and the European Commission are not yet complete and specific details of the changes are yet to be decided. Farmers are being notified now so that they are aware of this situation, and have the opportunity to contribute their views.

Defra is making every effort to minimise the potential impacts on agreement holders and to persuade the Commission to adopt a flexible approach, but it is likely that there will be some delays to at least some payments. We recognise the uncertainty that this issue will cause, and are working to resolve the situation as quickly as possible.

Defra does not expect to make any changes before 2011 at the earliest. In the meantime, farmers are encouraged to continue to apply for new or renewed Environmental Stewardship agreements as before.

Any changes to the schemes will not affect the amount of the payments or the total funding which farmers receive under their agreements.

Natural England will be writing to all farmers taking part in agri-environment schemes to inform them in more detail of the situation. Defra and Natural England will also be meeting all farming and other groups with an interest, to discuss the implications of these changes.