Farmers in England will be offered lump sum payments to leave the industry, alongside a new scheme designed to encourage new entrants to farming industry, under the reform of farm payments.
Defra said the changes, outlined in a consultation, published today, on changes to the Basic Payment Scheme (BPS) to support farmers through the agricultural transition period from now until 2027, will deliver a fairer system where payments are no longer based on size of land.
The consultation will be open for 12 weeks until August 11 and focuses on two key areas:
Lump sum exit scheme – Building on evidence that some farmers would like to retire or leave the industry but have found it difficult to do so for financial reasons, the Government proposes to offer them a lump sum payment in place of any further Direct Payments to help them do this in a planned and managed way. The consultation seeks views on who should be eligible for these lump sum payments and how the payments should be calculated.
Delinked payments – Defra said direct BPS payments currently offer ‘poor value for money and are based on how much land a farmer has, which inflates rent and can stand in the way of new entrants’. The Government plans to phase direct payments out over the gradual seven-year transition period, to move to a fairer system. The consultation includes plans to separate the payment from the amount of land farmed, from 2024. This will simplify the process for farmers, allow them to focus on running their business and encourage them to take up the government’s new environmental land management schemes, which will reward sustainable food production and environmental improvements. The consultation seeks views on how the ‘delinked’ payments will be calculated.
For pig farmers, the above will only apply to BPS claimants, meaning some producers will not be eligible.
New entrant scheme
The Government said it was also working together with industry leaders, local councils, land owners and new entrants to co-design a scheme to create real opportunities for new farming businesses. The new scheme will be available to support new entrants from 2022, with recommendations for its design to be shared later in the year.
Defra said a vibrant farming industry needs to attract new talent and create more opportunities for new entrants and farmers wishing to expand their businesses.
Defra Secretary George Eustice said: “We need to address the twin challenges of helping new entrants fulfil their dream and gain access to land, while also helping an older generation retire with dignity.
“Our exit scheme will offer farmers who want to exit the industry all of the area payments they would likely have received until the end of the transition period in a single lump sum. It gives them a real incentive to confront what can often be a difficult decision and will help them clear bills and settle debts.
“By renting out their farm or surrendering their tenancy, those exiting the industry will create important opportunities for the next generation of farmers and later this year we will be saying more about our plans to work with County Farm estates and other land owners to ensure that we nurture the right conditions for new enterprises to flourish.”
The proposals set out today also build on previous steps that have been taken to simplify the BPS, including simplifying penalties for small over-claims of land from the 2020 scheme year, the removal of EU greening requirements and improving the arrangements for farmers with land in more than one part of the UK, from the 2021 scheme year.
The Government published its Agricultural Transition Plan last year.
NFU Vice President Tom Bradshaw said: “As our agricultural support is overhauled, farm businesses across the country will be making life-changing decisions about the future of their farm or tenancy. We want to see a fair transition which allows farmers who are considering leaving the industry to have sufficient time and information to make those significant decisions.
“We must also recognise the personal nature of this decision and how no two farm businesses are the same, meaning each set of circumstances for a farmer considering a lump sum exit payment will be truly unique. We will now be consulting with our members extensively to understand their views on these proposals.
“Of course, any discussion around people exiting the industry must be coupled with how we attract new people into agriculture. It’s crucial that the schemes announced today work in a coherent way with schemes such as the New Entrant Scheme and Future Farm Resilience Fund to ensure British farming has a thriving workforce for generations to come.”
Country Land and Business Association President Mark Bridgeman said:
“We welcome the launch of this long-awaited consultation on the lump sum exit scheme and the administration of direct payments as the scheme is phased out.
“The consultation does give much-needed information on the exit scheme. But for those considering the scheme, there are still many questions to be answered that will only be available after the consultation.
“The biggest challenge is the timing, and there can be no further delays in launching the scheme later this year.”