Farmers who wish to leave the industry will be supported by a new Government scheme which provides a lump sum payment, allowing them to exit the sector in a managed way.

The scheme follows a public consultation carried out last year where the majority of respondents supported the initiative. It builds on evidence that some farmers would like to retire or leave the industry but have found it difficult to do so for financial reasons.

The scheme is part of reforms set out in the Agricultural Transition Plan which outlines plans for a new, fairer system of farming that works in the best interests of farmers now we are outside the Common Agricultural Policy, representing the biggest changes to farming and land management in 50 years.

In return for their payment, farmers will surrender their entitlements and be expected to either rent or sell their land or surrender their tenancy, in order to create opportunities for new entrants and farmers wishing to expand their businesses. The Government has also been working with in partnership with industry leaders, local councils and land owners to design a New Entrants scheme to create real opportunities for new farmers. 

The Lump Sum Exit Scheme is due to open in April and the application period will run until the end of September. The payment will be based on the average direct payments made to the farmer for the 2019 to 2021 Basic Payment Scheme years. This reference figure will be capped at £42,500 and multiplied by 2.35 to calculate the lump sum, meaning that farmers could receive up to around £100,000.

Over the past year, the Government has announced a number of schemes which will support farmers to boost food production, alongside payments for actions which benefit our environment.

Defra is working in partnership with farmers to design the new schemes and support the choices that they make for their own holdings. More than 3,000 farmers across the sector are testing and trialling the new approach. 

Environment Secretary George Eustice said: 

“Those of us who grew up with farming know the emotional connection farmers have with their land and the decision to retire or to exit the industry can be extremely difficult and is frequently postponed.

“The purpose of The Lump Sum Exit Scheme is to assist farmers who want to exit the industry to do so in a planned way and provide them with the means to make a meaningful choice about their future. The Scheme will also free up land for new entrants to farming and those who want to expand their businesses.” 

Direct Payments currently made through the Basic Payments Scheme offer poor value for money and are based on how much land a farmer has, which inflates rent and can stand in the way of new entrants. Following the consultation, the Government will also progress with plans to separate Direct Payments from the amount of land farmed, from 2024.