Environmental Land Management Schemes (ELMS)

Background

The new Agriculture Act received royal assent on the 11th November 2020. Prior to becoming law, the Act was described as “an “enabling” Bill containing 25 delegated powers with five of these allowing Ministers to modify Primary legislation[1]. The aim is to create the legislative framework necessary for the UK government to set its own agricultural policy following leaving the EU.  The Act therefore lays the framework for DEFRA’s future Environmental Land Management scheme. This is a new agricultural support system compared to the existing BPS subsidy scheme, said to focus wholly on environmental benefit rather than area of land farmed. The UK Government believes “… Common Agricultural Policy Payments have failed to reward some public goods adequately, such as measures to improve water quality and soil health. While agri-environmental schemes (Pillar 2) have produced evidenced benefits, government considers that overall, CAP has not been effective enough at reversing environmental damage caused by agriculture”.[2]

Timescale for introduction of ELMS

The replacement support mechanism is being introduced during a seven-year transition period which began in 2019. The Government is currently running a series of trials on the new scheme, which will continue until 2022, with pilot schemes then running from 2021 to 2024, and from 2025 the Government proposes that new Environmental Land Management (ELM) schemes will be fully up and running in England and Wales (see DEFRA’s Health & Harmony consultation timeline 2018). (Scotland & Northern Ireland’s devolved governments have their own proposals for how to support their farmers/land managers following the Brexit transition period ending in 2021).

Current scheme proposals

The Government stated in their Environmental Land Management Policy discussion document, issued in February 2020, that the ELM scheme will be split into three tiers. These are

Tier 1 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. Examples of activities the tier might cover include biological pest control, reduced stocking, field margins and cover crops. This may in practice be a minimum standard, perhaps resembling cross compliance, which farmers must meet to receive payment. Alternatively, it may be a selection of options allowing farmers to choose which to implement, across their holding in exchange for a payment, perhaps similar to to Entry Level Stewardship.

Tier 2 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 This will be for large-scale environmental change such as aforestation 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.

Each Tier would involve entering an agreement of some form, with a flexible duration. In the case of Tier 1, this may be an agreement to simply uphold a minimum standard above current legal obligations. For Tiers 2 and 3 this is more likely to involve carrying out specific actions in exchange for payment, perhaps not unlike in Countryside Stewardship.

How practically will ELMS work?

At this stage there is no detail available as to how exactly applying for the new scheme will work, or what level of payments will be received. There is, as above, room for some similarity between the Government’s proposals and some past and current schemes. However, a radically different approach may also be possible. Moreover, not only are we unaware of the level of payment, we are also unaware of how payments may be calculated. For example, under Tier 1, payment could feasibly be according to the size of the holding under the agreement, the number or area of options taken, so arbitrary measure of the options’ environmental impact or some other system entirely.

There was also for a while the suggestion of widely implementing payments “by results”, so for visible improvements to, for example, numbers of target species or soil organic matter. These proposals appear to since have been shelved.

While the Agriculture Act will enable the creation of statutory instruments to answer these questions, for now there remains little certain public information available.

Will ELMS offer appropriate financial reward for environmental and other “public goods”?

The Government states it intends to offer “fair rewards and strong incentives for participation [in an ELMS]”, however at this stage the requirements for entry and the formulas for calculating the level of payments to be made are also still to be debated and agreed. The funding has currently only been guaranteed until 2022 2024, the end of the current government, but there are calls from various stakeholder groups for the government to commit to a long-term budget to allow for clear business planning and investment by farmers/land managers. Whatever support schemes are eventually made available, they will need enough prior notice for farm business plans to be adapted.to fit in with farm and land management business plans, and as they cannot be compulsory (unless there are penalties for environmental failures), The Government will want to ensure the new schemes make financial sense for farmers to take part. The costs of joining and implementing an agreement should be significantly less than the benefits to be received – farmers/land managers. Otherwise participation will be minimal.

ELMS Testing & Trials Advisory Group

DEFRA now has an ELMS Testing & Trials Advisory Group made up of approx. 25 different stakeholder groups (e.g. CAAV, NFU, CLA, Farming Wildlife Advisory Group etc.) who have had experience of the current CS and other agri-environment schemes, and who can speak for their respective members. They are currently meeting at least once a month to discuss various approaches to delivering the support.

Other agricultural support

In addition to the ELM scheme, the Act also allows for payments to improve productivity and animal health. “Similar to the current Countryside Productivity scheme,” grants for productivity will include payments to cover part of the cost of investments in new equipment, including a small grant scheme where items will be chosen from a list.[3] Productivity support may also include funding for agricultural research, training and data availability. The Government’s proposals include a “single hub for evidence-based best practice”, although they have not elaborated on what this means, and the creation of a new professional body for farmers and growers.

The Government’s Farming for the Future policy document from February 2020 states that the Rural Development Programme for England (RDPE) will “continue”, although it does not state for how long or in what capacity. Among other grants, the RDPE currently pays for CS, set to close for new applicants in 2024, and the Growth Fund for new business ventures.

Summary

The ELM scheme 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 are set to begin 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.


[1] Page 4 – Commons Library Briefing Paper no. CPB 8405, 9 October 2018: The Agriculture Bill (2017-19)

[2] Page 19 – Dame Glenys Stacey’s Farm Inspection and Regulation Review (July 2018)

[3] Farming & Environment Committee Report for CAAV, 26.9.2018


  • This page will be updated as more information becomes available. (15.10.18)