The way in which the agriculture sector receives support from the UK Government is changing and this will be seen first-hand in December, when the Basic Payment Scheme (BPS) payment received on farms is lower than in 2020. This payment will gradually be reduced until 2028 when the BPS will have been phased out completely. However, the Government has stated that all of the funds saved from payments until 2024 will be put into other areas of agricultural support to boost productivity.
At present, the only additional funding available is through the Countryside Stewardship Scheme. Unlike previous years greening is no longer required as part of the BPS process, making stewardship now look more appealing. It is also a way to secure income for the next five years and, should the upcoming Environmental Land Management (ELM) scheme be a better option, agreement holders will be able to switch without penalty.
Looking ahead, the Farming Investment Fund will open in autumn 2021 supporting technology and productivity, with the grants funding equipment, technology and infrastructure. For those planning a larger project or investing, it may be worth waiting a few months to see whether other funding options emerge.
From 2022 capital grants will be available to support animal welfare improvements, and vet visits for health and welfare management planning will be supported too. The Sustainable Farming Incentive (SFI) scheme within ELM will also launch, paying for achieving standards for things such as soils and low input grassland management.
The monetary values for the SFI pilot studies have recently been released with payments of between £30 and £59 per hectare for achieving the arable soil standard. Recipients of BPS are able to sign up to the SFI pilot scheme using the online RPA function. Also, it’s thought the Countryside Stewardship Capital Grants scheme, which closes this month, will reopen in 2022, once again offering funding for standalone items such as boundary repairs, fencing and concreting yards.
Additionally, the lump sum exit scheme will be available to claimants of the BPS. The payment will replace future BPS claims and the claimant will be required to exit the industry. The tax implications of this payment and whether a ‘golden handshake’ will be offered remain unknown at this point, however a recent survey carried out by the Tenant Farmers Association (TFA) found that 75 per cent of those surveyed would ‘seriously consider’ taking this payment.
The TFA has stated that the sector could therefore see a marked increase in land mobility and this will hopefully encourage new entrants and succession planning across the industry.
While there is future support available, one thing is clear: BPS payments are declining and farmers and landowners will need to be proactive in finding new sources of income going forward.
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