A calculator has been developed for farmers to compare what they might expect to receive under the government's lump sum exit scheme.
Strutt & Parker's calculator shows the Basic Payments farmers are projected to receive if they continue to claim throughout the rest of the agricultural transition period, between 2022-2027.
Defra's proposal is to pay farmers 2.35 x the average of the BPS payment across 2018-20, with the lump sum payable subject to a payment cap of £100,000.
Strutt & Parker's calculations show that lowland farms over 182 hectares will be affected by the £100,000 cap. For this size farm, this equates to £549 per ha.
Jonathan Armitage, the firm's head of farming said: “Modelling suggests that if the farmer of the 182ha farm does not take the lump sum, they could expect to be paid £113,341 (which equates to £622/ha) over the period 2022 to 2027.
"This is based on how Defra has said payments will be reduced until 2024 and then on our assumption of a straight line cut from then to 2028."
He added: “Therefore, the farmer might receive £13,341 or 12% less from taking the lump sum. Or put another way, they could lose most of the payments they were due to receive in 2026 and 2027.
“It has always been anticipated that the sums of money would probably not be large enough on their own for wholesale change.
"But they may still bring forward some decisions and start some new conversations between landlords and tenants, and farmers looking for an opportunity to exit,” Mr Armitage said.
Farmers who would like to run the figures for their business through the calculator have been told to contact rural.enquiries@struttandparker.com.
