Farmers are being advised to consider their options as a brief window opens which will enable them to apply for a lump sum to exit the industry.
Those considering retirement or leaving the farming industry should seek advice as the Lump Sum Exit Scheme opens in April, Fisher German says.
It will be open for just six months, until 30 September, so those in the industry have only a short window of time to decide if this is the right option for them.
Considerations must also be made about if de-linked payments, which will replace Basic Payment Scheme (BPS) payments between 2024 and 2027 as the scheme continues to be phased out, would be more beneficial.
Fisher German is advising farmers to consider their options as the lump sum scheme will only be available this year and will not re-open in the future.
The considerations for farmers will be two-fold – whether they are looking to leave the industry and the lump sum option is suitable for them or if waiting for de-linking would be more financially beneficial.
To qualify for the lump sum option, farmers must have made a BPS claim in May 2018 and must agree to give up their farmland by May 2024.
This can be through gifting or selling the land or granting a tenancy with a minimum of five years, and the applicant is permitted to keep residential and commercial property, non-agricultural land and up to five hectares of agricultural land should they wish.
Those who take up the lump sum will not be able to apply for any new agreements under other support schemes such as the Sustainable Farming Incentive or Countryside Stewardship.
Matthew Ayres, of Fisher German, said: “There are still certain grey areas, and we are hoping that further details around this will be released in spring when the application process opens.
"But the window to apply is extremely brief and the scheme won’t be suitable for all, so anyone considering it should speak to an advisor to ensure it’s the right option for them."
He added: “What is critical will be de-linking in 2024, and farmers thinking about retiring in the coming years will need to decide which is more advantageous.
“The phasing out of BPS payments is an extremely significant change in the industry, and there is a whole generation of farmers who haven’t seen anything other than BPS support."
It is expected that claimants who take up the lump sum but keep hold of the minimum five hectares will still have the rights to a reduced level of de-linked payments from 2024 to 2027.
Mr Ayres said: “Those looking to leave the industry will be required to consider all of their options to ensure they are making the best financial decision.”
