Following the government’s launch of their post-Brexit farming plan, H&H Land & Estates digests the 66-page document to pull out the key policy changes.
A new approach to farming support beckons as the UK draws ever closer to the end of the Brexit transition period.
The plan published by the government outlines a seven-year timescale to change the way farming is funded, managed, and incentivised.
The industry has heard much about the new environmental and sustainability focus, but the principal announcements by Defra outline the pace and nature of this shift.
2021 BPS scheme takeaways
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.
• 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.
Other noteworthy schemes announced
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.
