On the 30th November 2020, following the Agriculture Act 2020 receiving Royal Assent on 11th November, DEFRA published two new documents setting out their intentions for the future of agricultural grants and subsidies in England during the agricultural transition. The publications detail these changes over a relatively long timescale, up until 2024, so we cannot be certain that everything will happen exactly as DEFRA currently describes. Nonetheless, the publications provide a “roadmap” showing greater detail about DEFRA’s intentions for the future of farming support.
The Agricultural Transition Plan outlines ways in which farmers will be supported whilst dealing with the loss of BPS/direct payments. However, at this point many of the new schemes are still in the consultation stages with few details available yet on the application process and specific benefits. These new schemes are listed below in paragraphs 4 to 12.
1. THE ENGLISH BASIC PAYMENT SCHEME (BPS)
DEFRA has confirmed several changes to BPS:
1.1 The payment reduction bands for BPS in England up to 2024 have now been confirmed. We set out below the reductions for 2021, which increase in steps by 15% per year for each band. These bands will effectively function like income tax, with the first band of reductions applied to the first £30,000 taken from scheme, the next to the next £20,000, and so on.
1.2 The rule in which BPS entitlements must be claimed upon every 2 years or else be clawed back by the RPA will no longer apply “to the 2021 scheme” in England.
1.3 There will be less harsh penalties for cross compliance breaches, including more use of warning letters rather than immediate penalties.
1.4 As we were already aware, greening requirements, including Ecological Focus Areas, the “Three Crop Rule” and the rules governing loss of permanent pasture, will no longer apply from 2021.
DEFRA have also laid out several other indicators of where we are heading, subject to consultation:
1.5 Delinkage is planned to apply from 2024, not as early as 2022 as is possible under the Agriculture Act 2020.
1.6 From 2022 DEFRA intends to offer an “exit scheme” where some retiring farmers can receive a lump sum payment in place of Direct Payments (whether under the BPS or delinked payments) they would have been entitled to receive during the remainder of the agricultural transition.
In addition to these changes, DEFRA is also consulting on how BPS will be handled on the New Forest in the interim period prior to Delinkage.
1.7 The current BPS system for the New Forest bases payment values on the number of grazing stock registered with the Forest’s administrators (known as Verderers) through payment of “marking fees”. Allegations have reached the High Court that this current system amounts to a headage payment, which would be illegal, and has led to overgrazing. DEFRA’s consultation outlines three potential replacement methods of assessing claims in the New Forest:
| 1.7.1 | Each claimant would be entitled to claim on a proportion of the forest based on the claim they made in a particular reference year. |
| 1.7.2 | Claims could be made on a fraction of the common in proportion to any other land the claimant farmed which was not part of the common. In practice, this is likely to be based on their BPS claims. |
| 1.7.3 | Claim value would be based on non-productive agricultural work on the common, such as scrub clearance, maintenance of boundaries, membership of agri-environment schemes, etc. |
DEFRA is also accepting ideas from consultees, so we do not know at this stage which, if any, of these options will be pursued.
2. ENVIRONMENTAL LAND MANAGEMENT (ELM) SCHEME
There is still no information on the payments which will be available under this scheme. However, whilst the scheme continues to go through trials, pilot schemes and consultation, some new details have come to light about DEFRA’s proposals. This includes the names of the three proposed tiers:
2.1 The Sustainable Farming Incentive
This is the “Tier 1” scheme which DEFRA intends will pay for environmental improvements and is designed to be relatively easily integrate into a standard commercial operation. DEFRA’s consultation proposal is for this be open to applications from all farmers from 2022, in a limited form, with more detail including payment rates intended for release by June 2021. It is intended to be fully operational by 2024. The scheme is described as having a choice of “packages” containing different options, allowing farmers to choose greater or lesser depths of commitment for a correspondingly lower or higher payment.
2.2 Local Nature Recovery
DEFRA confirms that this “Tier 2” scheme is intended to directly replace Countryside Stewardship. Subject to consultation, a national pilot will open for applications in 2021, with the first agreements aimed to be active in 2022.
2.3 Landscape Recovery
This “Tier 3” scheme is proposed as being for large scale projects, likely thousands of hectares in area, and for activities such as peatland restoration, woodland planting and rewilding. DEFRA will consult on a national pilot featuring 10 projects to open for applications in 2021, with schemes potentially beginning in 2022.
3. COUNTRYSIDE STEWARDSHIP
Subject to consultation, DEFRA intends to honour existing agreements and keep the scheme open for applications until 2024. In addition to changes already implemented, which have largely affected the penalty and inspection process, DEFRA’s proposed changes for 2021 include:
3.1 Doubling the maximum value of capital-only schemes to £20,000;
3.2 Additional options and/or capital items for educational access and air quality improvement;
3.3 Simpler woodland schemes;
3.4 Expansion of eligible areas for the £88/ha UP2 “management of rough grazing for birds”.
4. FARMING INVESTMENT FUND
This is intended to include a range of grants and investments, aimed at increasing productivity, resilience, and skills through training. Grants will incentivise farmers, foresters, and related contractors to invest in equipment, technology, and infrastructure to deliver environmental and public benefits. This will include making more efficient use of water or using nutrients and pesticides more effectively. These will be part-funded by the farmer/land manager and based on the Countryside Productivity Scheme. Grants will cover a higher proportion of the cost the greater the “public goods” that are delivered. Details of how this will be judged remains to be seen. The idea is for this process to be competitive, with higher scoring applications more likely to succeed.
5. NEW ENTRANTS SUPPORT SCHEME
New Entrants will receive funding to help with accessing land, infrastructure and other forms of support. This is to encourage new innovative talent into the industry. DEFRA will work with Councils, landowners, and stakeholders to create opportunities for these new entrants. The scheme will open to applicants in 2022.
6. SLURRY INVESTMENT SCHEME
Raised standards will be required for slurry storage in the future to meet the 25 Year Environmental Plan with its net-zero targets. The Slurry Investment Scheme is being introduced in 2022 to help farmers reduce pollution by investing in new slurry stores that exceed current requirements and are future-proof against the expected higher standards that will be introduced shortly as part of the Clean Air Strategy. This also covers investment in low emission slurry spreaders which are set to be a requirement from 2025. The scheme will at first target areas where the environmental impact will be the greatest. The scheme will cover large amounts of the capital cost of stores, covers and other associated equipment but not future maintenance or planning costs.
7. INNOVATION, DEVELOPMENT AND RESEARCH SCHEMES
This scheme will fund cooperation between farmers, agri-businesses and researchers to undertake research and development projects over the course of 3 to 4 years. The aims will include achieving net-zero carbon emissions and ‘transforming’ long term productivity in food production. Small 2-year projects will test new technology and farming methods. Examples of this are the ‘Transforming Food Production Initiative’ which trials robotic weeders. This scheme will be open to all but must be collaborative between farmers/businesses/research organisations. Pre-launch workshops will be hosted in the summer of 2021 to bring together project teams.
8. TREE HEALTH PILOT
This scheme will expand on the existing Countryside Stewardship Tree Health Grants to broaden the range of species/pests/diseases it covers and those eligible for support. This will provide support for felling and treatment of diseased trees to slow the spread of pests and disease and for restocking to ensure no net loss of trees. The payments are different to current Countryside Stewardship grants and will not provide support for the same things.
9. FARMING IN PROTECTED LANDSCAPES
This scheme supports farmers in protected landscape areas, helping them with roles such as carbon capture, dry-stone wall repairs and moorland management. It will encourage peat restoration, woodland planting and hay meadow restoration. More information will be released in 2021.
10. ANIMAL HEALTH AND WELFARE
Small one-off grants and large multiple-stage capital grants will be provided to invest in measures to improve welfare above the statutory baseline standards. This will include improving cattle handling facilities, equipment to improve biosecurity, rubber walkways to prevent lameness, etc. Every farm involved will have a ‘progressive programme of improvement’ to support health and disease management.
11. FARM RESILIENCE
During the first three years of the transition until 2024, DEFRAs Farm Resilience support will target individuals and businesses most affected by the removal of Direct Payments. This will include advice and support from support groups, charities, or businesses.
12. SKILLS AND TRAINING
The Government will contribute towards the establishment of a professional body called the ‘Institute for Agriculture and Horticulture’. This will be the professional hub for training and development of skills in agriculture and horticulture. This will establish a pathway for farmers to train across their careers. From 2023 it will create new Apprenticeship Standards and the ‘T level’ qualification in Agriculture, Land Management and Production.
All of this this information is contained in two separate publications from DEFRA. “The Path to Sustainable Farming”, a policy document, can be found at Agricultural transition plan 2021 to 2024 – GOV.UK (www.gov.uk), And DEFRA’s accompanying “Farming is Changing” guidance document is at Farming is changing in England from 1 January 2021 – GOV.UK (www.gov.uk).