Agricultural Policy post Brexit; what you need to know
Towards the end of last year, the Government revealed the Agricultural Transition Plan (ATP) 2021-2024; ‘A path to sustainable farming’. The plan is a first step into the Agricultural Transition Period, which represents the Government’s domestic farming policy as we exit the European Union (EU) and Common Agricultural Policy (CAP). Signposted as a generation defining shift in agricultural policy and new dawn for the industry in the UK, this is a period of drastic change and uncertainty.
Context
The ATP can be described as the weaning period designed to acclimatise farmers to a future without ‘direct aid’ or subsidy linked solely to producing food. The concept of ‘Public Goods for Public Money’ emphasises the direction of legislative travel, which will extend through to 2027. At this stage, we are only working with policy to 2024, albeit with early indications of what’s to follow in the latter stages of ‘transition’. In place of the Basic Payment Scheme (BPS) the ATP promises to realign financial support of agriculture; “We will pay farmers to improve the environment, improve animal health and welfare, and reduce carbon emissions” (George Eustice; Secretary of State for DEFRA)
What’s Next?
The ATP outlines the broad structure for farm support schemes in place of BPS as it is phased out (by 2027). To support farmers over the next four year period, we know that:-
An equivalent of BPS will continue to be paid for the period 2021-2027. The level of payment will relate to a historic reference period (as yet unknown), with a gradual reduction based on quantum received. This year, that will equate to a 5% reduction on the first £30,000 per business, through to a 25% reduction on anything over £150,000. By 2027, the reductions will be 50% on the first £30,000, up to a 70% decrease in payments over £150,000. Despite a simplified system and withdrawal of greening requirements, the reductions are now live and leave a hole in the industry’s finances.
Retiring farmers may be able to apply for a lump-sum payment reflecting their full entitlement for the period 2022-2027. The specific terms and conditions are pending in the next few months, but this may present an opportunity for those seeking to exit ‘active farming’.
What Else
Countryside Stewardship (i.e. mid-tier and higher tier) will remain in place both in terms of funding for existing schemes and new applications during 2021-24. DEFRA have committed to reduce some of the bureaucracy around agreement enforcement and inspections, but otherwise Stewardship as we know it remains largely unchanged. We would encourage our clients to consider Countryside Stewardship at this stage and the viability of schemes on their farms while funding is available, particularly the new stand-alone capital grants focussing on water quality, air quality and boundaries. Well-structured and managed agreements can provide important supplementary income alongside ongoing agricultural practice. The agreements are 5 years in duration, however DEFRA have confirmed that schemes only part way complete in 2024, can be terminated ‘early’ without penalty, if they are compliant at that time and replaced with the new Environmental Land Management Scheme (ELMS), as covered below.
What’s New?
The ATP outlines a series of replacement measures in place of BPS to support farmers financially through the transition period.
Environmental Land Management Scheme (ELMS)
The long-term successor to Countryside Stewardship; ELMS is currently being piloted across the country with a view to going live in 2024. The scheme presents a familiar tiered theme, with Mid-Tier seemingly replaced by the Sustainable Farming Incentive (SFI). While we do not have flesh on the bones at this stage, we understand that this will be accessible to all and likely to consist of similar management ‘options’ linked to environmentally friendly farming practices.
Beyond the SFI, nature recovery strategies at local and national level will complete the three components of ELMS. Agreements will be bespoke and targeted towards local or national environmental and habitat priorities. These tiers are likely to be competitive, heavily based on where you farm and contingent on collaborative working or cluster groups; that we are seeing emerge in certain areas of the country.
Our advice at this stage it to watch this space.
Catchment Sensitive Farming
The grant based scheme will continue to offer support from 2021 for farmers in priority catchments; to include covering slurry stores and yard areas. If you have previously applied for CSF either successfully or not, this may be worth reviewing in 2021.
Farmers in Protected Landscapes
This will essentially provide targeted support to farmers in National Parks, uplands and some Areas of Outstanding Natural Beauty (AONB). Very little detail has been released, but the scheme will fund farm level projects and wider infrastructure investments; examples may include peat or hay meadow restoration on single sites, through to improved disabled access in National Parks.
Farming Investment Fund
From autumn this year, this new fund is due to open with some parallels to the Countryside Productivity Scheme. It will offer competitive match-funding under low and high value tiers for equipment, technology, and infrastructure that improve farm productivity and benefit the environment. Eligible investments could include processing and storage equipment; robotic or automated technology; or water storage infrastructure such as reservoirs.
A slurry investment scheme will also follow in 2022 to provide grant funding towards improvement in storage and application of slurry; as part of the targeted reduction in carbon emissions.
New Entrants Support Scheme
This is certainly one to watch and appears to require grass-roots input at the consultation stage beginning this year. In essence, funding will aim to create start-up innovation hubs and provide new tenant farmers and those using other business models with ‘access land’ and infrastructure. There may be opportunities for council farm tenants or young farmers seeking to take a step-into formal positions within businesses.
Woodland Creation
Designed to replace the Countryside Stewardship Woodland Capital Tree Health Restoration and Improvement grants, a new tree health initiative is landing in the Spring to address tree disease, associated felling, and re-stocking. This will be led by the Forestry Commission and should provide greater support to landowners hit particularly by ash die-back.
Animal Health & Welfare
A new ‘pathway’ will be forthcoming to maintain current high welfare standards, improve transparency and labelling, together with enhancement in animal health; examples may include capital grants for veterinary visits, disease control and data sharing. Consultation is now underway with pilots expected to commence in 2022.
The above summary of key farm support schemes coming on-line in the next couple of years illustrates the extent of change to funding as we know it. Ensuring that you are best placed to benefit from the support that is both currently available and under consultation is vitally important; now more than ever with the demise of BPS.
We welcome the opportunity to discuss the position of your farming business and would be delighted to help. Please do get in contact if you have any questions at all and we look forward to hearing from you.