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ELMS

Environmental Land Management Schemes (ELMS) to consist of three schemes: Sustainable Farming Incentive (SFI), Local Nature Recovery (LNR) and Landscape Recovery (LR). 

  • The SFI Pilot will be launched in October 2021, with a wider roll-out in 2022. The full version will launch in 2024. 
  • Local Nature Recovery will pilot in 2022 and launch in 2024. 
  • Landscape Recovery will have 10 pilot projects in 2022 and launch in 2024. 

Sustainable Farming Incentive  

  • Aimed at being the most accessible to commercial holdings. 
  • Will consist of a number of standards. 
  • Each standard will have either an introductory, intermediate, or advanced ‘ambition’ level with higher levels having a higher payment but requiring additional actions, (see payment rates below). 
  • Actions might include, for example, reducing inputs, leaving buffer strips or keeping grass swards at a certain prescribed height. 
  • Not all of a holding needs to be included in the scheme.  
  • Different parcels may have different standards. 
  • Some standards may be stacked on the same parcel e.g. Improved Grassland, Grassland Soils and Hedgerow standards. 
  • Payment will be monthly. 
  • Capital Items may be claimed (confirmed for pilot scheme). 

Local Nature Recovery  

  • Paid activities for meeting particular objectives for the land.  
  • May be delivered collaboratively between multiple farmers. 
  • More detail is to follow. 

Landscape Recovery  

  • Large-scale projects  
  • Environmental change such as afforestation or creation of new wetlands. 
  • More detail is to follow.  

This information is accurate at the time of writing and professional advise should be sought before relying on it. It is subject to confirmation.  

Current scheme proposals 

The ELM scheme will be split into three tiers, as follows: 

Tier 1.  Sustainable Farming Incentive

This will pay for management changes directed at improving environmental performance of farming operations. The Government aim for this tier to be accessible and “straightforward,” with an uptake by most farms in the country. Documentation in relation to the Pilot Scheme suggests it will be a series of area and length-based payments made according to land use.

Actions will be required to receive payment, known as standards. Each Standard will have an ambition level of introductory, intermediate, or advanced. Each level requires a progressively higher number of different actions to be undertaken. For example, based on the pilot scheme, the hedgerow payment, has an introductory level of £16/100m and requires a proportion of your hedges to be left uncut each year and maintaining a number of hedgerow trees. The intermediate-level £21/100m requires more hedgerow trees, some hedgerow buffer strips to be in place and also either a higher cutting height or more uncut areas each year relative to the introductory payment. The advanced £24/100m payment requires more trees and buffer strips in addition to all of the introductory and intermediate level requirements. 

More information on the SFI pilot scheme may be found here and on the standards being used here. The pilot will also allow claiming of up to £60,000 worth of Capital Items, it will use an application system with payment rates based on the Countryside Stewardship Capital Grants Scheme. A list of claimable items to be used for the pilot can be found here. 

For our current observations on the Sustainable Farming Incentive and insight on what the pilot will involve see here. This should be used as a taste for what is to come. We aim to update and share what we, and our clients, learn from the pilot as it progresses and further forms of SFI are introduced. 

Tier 2. Local Nature Recovery 

This will pay for management of land specifically for environmental purposes, rather than environmental improvements for other purposes. It may be more closely targeted than Tier 1, with paid activities being tailored towards particular objectives for the land. The Government hopes these schemes will be delivered collaboratively between multiple farmers. Paid activities might include tree and hedgerow planting, habitat creation, control of invasive species and educational events. 

Tier 3. Landscape Recovery 

This will be for large-scale environmental change such as afforestation and creation of new wetlands. DEFRA states funding for this may combine public finance with private money, which suggests that commerciality is not a priority. Although the Government hopes this Tier could be achieved through co-operation between large numbers of landowners, it may in practice be more relevant to landowning environmental charities, corporate concerns keen to improve their “green” image and environmentally-driven high net worth individuals. Funding for these projects may be a combination of private and public sources with at least 10 projects to launch between 2022 and 2024.  

  • Proposed to be available to applications from sites of between 500 to 5,000 hectares.  
  • May be undertaken by collaborative groups of farmers and land managers, individuals, or organisations such as non-government organisations.  
  • Open for applications in the autumn 2021. 

Other agricultural support 

In addition to the ELM scheme, the Government has also proposed the Farming Investment Fund to provide capital payments for improving productivity and animal welfare. This is to be split into two payment schemes. 

The first of these, the Farming Equipment Technology Fund, will “offer small grants to contribute towards the purchase of a list of specified items”, which sounds similar to the Countryside Productivity Small Grants scheme on which DEFRA says it is based. However, there are still many unknowns under the new scheme, such as the items to be funded and the funding available for them, and also whether there will still be a cap on the maximum annual claim under the scheme and, if so, what this cap will be. 

The second funding scheme, the Farming Transformation Scheme, is perhaps less familiar. This is proposed to offer larger grants for more substantial investments to “transform business performance”. Potential funding areas include automated technology, water infrastructure such as reservoirs, and storage equipment. 

Summary 

ELMS will most likely be the cornerstone of agricultural payments in England and Wales post-Brexit. It is clear that after the UK transition period farmers/land managers in England or Wales will need to apply for an ELM agreement to receive the bulk of available Government funded financial support. It is likely that an application to whichever body eventually administers and regulates the scheme will require some kind of environmental audit of their land, whether done by the farmer, or with the support of a land agent/environmental consultant. How the application is submitted, and how much detail will be needed, is yet to be confirmed. 

In short, while some detail about the new scheme has been released, there remain significant gaps even as BPS reductions started in 2021.  

Any farming business needs to know as much and as soon as possible about this new scheme, especially when the enabling powers are used to create new statutory instruments. 

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Hugh Townsend

Hugh Townsend
FRICS. FCIArb. FAAV.

01392 823935
htownsend@townsendcharteredsurveyors.co.uk

Mark Burton

Mark Burton
BA(Hons). MSc

01392 823935
mburton@townsendcharteredsurveyors.co.uk