The knowns and unknowns on the future of farm subsidies

The face of rural subsidies is changing and grants available to farmers will shift significantly over the coming years towards a more environmentally focused system.

As I am sure you have read previously, the Agriculture Act gained royal assent back in November. This was swiftly followed by DEFRA releasing the Agricultural Transition Plan (The Path to Sustainable Farming). Before slipping into a food-based coma over the festive period, it gave me time to reflect on what is known and, just as importantly, what is unknown about the future of the rural subsidies.

What is for certain is that the new schemes are moving away from the current Basic Payment Scheme (BPS) and towards a system in which farmers are rewarded for improving the environment, improving animal health and welfare, and reducing carbon emissions.

The transition will begin straight away in 2021 with several keys changes to the existing BPS including the removal of greening rules (crop diversification, EFA’s and permanent grassland) and the first reductions to the BPS payments (5-25%, depending on the claim amount).

2021 will also see the start of more detailed guidance in relation to the new Environmental Land Management Schemes (ELMS). We are expecting the National Pilot to be available in the spring, which will enable farmers the opportunity to assist with the schemes design and implementation.

In 2022 we will see more schemes and opportunities released. The Sustainable Farming Incentive (SFI) will reward farmers for any environmentally sustainable land management practices. It is intended for this scheme to offer a simple package that is attractive for all farmers to enter. 2022 will also see the opportunity for retiring farmers to take a lump sum BPS payment, as part of an ‘exit’ scheme.

2024 may seem a long way off, but this is when we will see the biggest shift in subsidies. The BPS payments will be de-linking from land and the amount received will be reduced by approximately 50%. At the same time, ELMS will be fully rolled out, with the three core principles (environment, animal health & welfare and carbon) forming the cornerstone of the scheme.

The Transition Plan is an excellent start to the shift away from BPS, and in my opinion has some good baseline intensions. However, there are still plenty of questions to be answered. Many farmers are already asking about the finer details, the requirements and how much revenue is available. As we are all too aware, the devil is in detail, so watch this space throughout 2021 as further details are released.

 

Dan Bowden, MRICS, FAAV is a Partner with Barbers Rural Consultancy LLP and can be contacted on 01630 692500 or d.bowden@barbers-rural.co.uk

We use cookies on our website to support technical features that enhance your user experience.

We also use analytics & advertising services. To opt-out click for more information.