Clearing the path ahead for English farmers.

Posted by LindaStenner on February 10, 2021

The Government has set out its plans for farming in a new document The Path to Sustainable Farming’: An Agricultural Transition Plan 2021 to 2024.

The Transition Plan provides a practical level of detail that commentators, advisors and farmers alike have been waiting for since the arrival of the Agricultural Act. The document re-affirms DEFRA policies to support environmental and animal welfare outcomes, improve farm prosperity and the phasing out of the Basic Payment Scheme (BPS).

“This document illustrates the transitional mechanisms that will take us away from BPS towards the Environmental Land Management Scheme (ELMS),” said Edward Page, associate director at David Meade Property Consultants.

“As a firm of chartered surveyors with a strong background in agricultural tenancy work, we can advise on the impact of these regulations on landlord and tenant arrangements.”

A summary of principle points from the Transition Plan:

• Reduced direct payments, starting from the 2021 BPS year with funds re-directed to new grants and support schemes.
• The launch of a Farming Investment Fund to support innovation and productivity. This will open for applications later this year and will be available for equipment, technology and infrastructure investment.
• Simplifying and improving existing schemes and cutting red tape to develop a more targeted compliance and regulatory system.

“We now know more about the three components of ELMS allowing farmers and land managers to assess which component is best-suited to their land,” he said.

The components are:

• The Sustainable Farming Incentive, which will support approaches to farm husbandry that deliver for the environment, such as actions to improve soil health, hedgerows and pest management.
• Local Nature Recovery, which will pay for actions such as creating, managing or restoring habitats, natural flood management and species management,
• Landscape Recovery, which will focus on landscape and ecosystem recovery through projects looking to achieve large-scale forest and woodland creation, peatland restoration, or the creation and restoration of coastal habitats.

“The new Farming Investment Fund will open for applications later this year and will provide support for businesses to invest in equipment, technology, and infrastructure to boost productivity and deliver environmental and other public benefits,” Edward said.

“The two levels for this fund will be the Farming Equipment Technology Fund, which will offer small grants to purchase specified items and the Farming Transformation Fund with larger grants for more substantial investments in equipment, technology or infrastructure, with the potential to transform business performance.

“A separate scheme called Farming in Protected Landscapes will aid the transition and loss of BPS for farmers through National Park Authorities and Areas of Outstanding Natural Beauty bodies.

“DEFRA estimate this scheme will support up to 75 per cent of upland farmers.”

He said a claimant’s eligibility to receive the full transition period of BPS claims in a single payment, or a “lump sum”, warrants close attention especially where land is let.

“The Transition Plan confirms lump sum payments will be available from 2022 and can be taken in any year of the transition. A consequence of a lump sum payment taken in 2022 is that it takes all remaining annual payments from the land with potentially no further subsidy available until the roll out of ELMS in 2024.

“The value of a Countryside Stewardship contract as a bridge between two schemes in this scenario is clear.”

As can be seen with lump sum payments, these regulations remove the link between payments and the requirement to farm the area of land. 

The de-linking of the payment from the farming activity will start in 2024 to coincide with ELMS and the end of the entitlement system.

We have now entered the first year of the transition period and the first year of payment reduction.  

“The first year payment reduction was made clear to the industry prior to this publication but farmers will now see a real pressure on their 2022 payment,” Edward said.

“For claims less than £30,000, 2021 will bring a five per cent reduction and a 20 per cent reduction in 2022 on the base year of 2020.”

For further advice contact Edward Page on 07496 914731 or email edwardpage@dmpcuk.com