Future Government Policy Update
As many of you will have seen in the farming press, there were a lot of announcements from Government last week about their plans for Agricultural policies going forward, particularly in relation to the future of the Basic Payment Scheme (BPS), the Common Agricultural Policy (CAP), and the new Environmental Land Management System (ELMS).
There is a lot of information to digest so we thought it would be sensible to provide a summary of the key points for you.
Basic Payment Scheme
As we already knew, the Basic Payment Scheme is being phased out, and payments will gradually reduce. We now have confirmation that the final payments will be made for the 2027 scheme year. Reductions will start from 2021 on a sliding scale dependent on the total value of your current payment. We have developed a quick calculator tool you can use to get an idea of your expected payment in 2021 which you can access by clicking here.
From 2022 the reductions will increase, but there has been no announcement yet as to what the reductions will be beyond 2021.
At some point the payments will be delinked from land, and they will also look to offer one off lump sum payments in place of direct payments. The earliest this will happen is 2022. One the payments are delinked, you will not be required to have any land or entitlements, but payments will be based on a reference period of 1 or more years, but the reference period is yet to be confirmed.
The good news is that they will be simplifying the BPS system from 2021 and they are looking at the removing the greening element at this point.
New Capital Grant Schemes
DEFRA assure us that the money saved through the reduction in BPS payments will be reinvested in to Agriculture. It is anticipated that this will be through Capital Grant Schemes to improve Productivity, Health & Welfare. They expect these grants to be available from early 2021 and are likely to include things like Robotic Milking Systems, Precision Slurry Equipment, variable rate sprayers and energy efficient lighting. We will keep you updated with this new schemes as and when information becomes available.
The New Environmental Land Management System (ELMs)
Information is very vague on this, but the principle will be that you will be paid for good land management, in a similar way to the current Countryside Stewardship schemes. Again, we will update you as more useful information becomes available on this. The key point DEFRA are making here is that the Countryside Stewardship scheme is a very good stepping stone on to the new ELM's system, so if you aren't currently in a scheme it would be very sensible to look at this year.
DEFRA are seeking views from Farmers now to shape this new system, and we would encourage you take part if you can. You can access the survey at https://consult.defra.gov.uk/elm/elmpolicyconsultation/
It has been confirmed that this scheme will be open for applications in 2020, 2021, 2022, and 2023. However, this is a good way of topping up the income you will be losing through reductions in BPS so we would strongly suggest you put an application in this Spring to start from January 2021. If you would be better off under the new ELM system when it comes in, you wont be disadvantaged - you will be able to move across. If you would like to discuss your options on this please contact us.
If you would like to read the full publication from DEFRA, you can access it here.