Farming News - Seven Years to Change the Face of Farming

Seven Years to Change the Face of Farming

02 Dec 2020
Frontdesk / Finance

Following the Government’s launch of their “Path to Sustainable Farming” plan, David Morley, Head of Conservation & Environment at H&H Land & Estates, digests the 66-page document to pull out the key policy changes. Through his role at one of the North’s leading land and property agencies, David offers key insights into the main features of the transition plan.

“A new approach to farming support beckons as we draw ever closer to Britain’s departure from the EU. The plan published by the Government outlines a seven-year timescale to change the way farming is funded, managed, and incentivised. We have heard much about the new environmental and sustainability focus, but the principal announcements of the DEFRA transition outline the pace and nature of this shift.

As previously announced, Basic Payment Scheme (BPS) direct payments will be phased out over the period 2021-2027. In 2021, the reduction will be between 5% and 25% depending on current BPS income, with further 15% reductions across the board each year from 2022 to 2024, and then continued gradual reductions in each subsequent year.

2021 BPS scheme takeaways:

  • All greening requirements have been removed
  • No requirement to use entitlements at least once every 2 years
  • Cross-border farms will have their payments split between the respective devolved payment agencies, rather than having to be paid by just one agency.
  • The Government proposes to de-link remaining BPS payments from land, probably from 2024, greatly simplifying the claim process.

DEFRA is set to launch an Exit Support Scheme in 2022, which will provide a financial incentive to allow farmers to leave the industry. In tandem, there will be a New Entrant Support Scheme to encourage new starters into farming

Environmental Land Management (ELM)

With more detail on the new ELM scheme (split into three main components), it is clear emphasis will be on outcomes, rather than prescriptions. The intention is to increase participation in environmental schemes from the current rate of 30% to 70% by end of the transition period. We will hear in early 2021 what the payment rates and land management actions will be, with initiatives focusing on:

  • Clean water and clean air
  • Biodiversity and habitat management
  • Beautiful landscapes
  • Adaptation to climate change and flood mitigation
  • Conservation of historic environmental and cultural heritage
  • Healthy soils
  • Public engagement and access

The Sustainable Farming Incentive will be a universal scheme open to all farmers, including those already in Countryside or Environmental Stewardship. It is expected to be partially rolled out in 2022 (for farmers currently claiming BPS only) with the full scheme becoming available from late 2024.

Initially the launch will be focused on:

  • Soil management
  • Integrated pest management
  • Nutrient management
  • Livestock management

Later offering support for:

  • Crop land management
  • Grassland management
  • Tree & woodland management
  • Boundary & hedgerow management
  • Efficient water use
  • Measures to benefit wildlife & biodiversity
  • Protection of heritage assets

The second component is being branded Local Nature Recovery, which will fund land management and capital options to deliver a wide range of environmental benefits for the local area. This will include creating, managing and restoring habitats, tree and hedge planting, options to mitigate flooding, permissive access and educational visits. Collaboration will be encouraged, to incentivise farmers to work together to produce benefits across a wider area.

Although not covered by the latest announcement, early indications are that payments will be calculated on an “income foregone plus costs” basis, as it is in the Countryside Stewardship (CS) Scheme. However, this approach could be disastrous for upland farmers in particular, because their margins and returns and naturally lower. Despite it being more complex to pay farmers based on the value of the public goods they produce, this really is a necessity if farmers are to be adequately rewarded for the benefits they deliver for society.

In addition to the new ELM scheme, DEFRA have announced a number of other schemes to be launched during the transition. For farmers operating in National Parks and Areas of Outstanding Natural Beauty, additional support will be made available covering projects in:

  • Habitat management & restoration
  • Dry stone wall restoration
  • Business planning
  • Carbon capture
  • Skill development & apprenticeships
  • Better access & signage
  • Public engagement with landscapes

The “Path to Sustainable Farming” will see the government will provide payments to farmers to raise Animal Health and Welfare, where these are over and above the legal requirements. Grants will initially relate to disease control, with capital grants for livestock handling facilities and biosecurity, starting from late 2022/early 2023.

Finally, the plan touches on a Farming Investment Fund for the purchase of equipment, technology and infrastructure to support environmentally sustainable farming (similar to the previous Countryside Productivity Scheme) from Autumn 2021. And, from 2022, there will be a Slurry Investment Scheme will provide grants to support new slurry stores. At the same time, new regulations will be introduced to compel farmers to cover all slurry stores to reduce emissions.

In the meantime, the Countryside Stewardship Scheme will be open for new applications in 2021, 2022 and 2023. For 2021, The limit on capital-only Water Capital and Hedgerows & Boundaries Grants will be increased from £10k to £20k. DEFRA has also reiterated its policy that it will be possible to move from a CS agreement to an ELM Scheme without penalty, so all farmers not in a Scheme should consider applying for CS in the coming years to help them prepare for the transition in agriculture.”