SWFC’s Anna Heaton looks at Defra’s new Agricultural Transition Plan and what we can definitely say is going to happen – and what are the big unknowns
In November, Defra released The Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024, alongside the summary document, Farming is Changing. The intent, as stated by Defra, is as follows:
We will pay farmers to improve the environment, improve animal health and welfare, and reduce carbon emissions. By 2028, we want to see:
* a renewed agricultural sector, producing healthy food for consumption at home and abroad, where farms can be profitable and economically sustainable without subsidy
* farming and the countryside contributing significantly to environmental goals including addressing climate change
The Devil’s in the detail
Sustainable farming that addresses climate change is, of course, an important goal – and one that SWFC is able to support. We would also agree that the system of direct payments through BPS needed reform.
But, as ever, the devil is in the detail – and detail is something that is lacking in both these documents. While Defra recognises that:
“We know that we have previously not always got things right in the way we design and administer schemes and that this has caused problems for people…” [Ed – Perhaps the understatement of the year there!]
They also say: “… during the early years we won’t be able to answer all the questions people rightly have about how this is going to work. This may be frustrating: we know farming operates to long time frames and we need to provide as much certainty as we can, as soon as we can. But to get this right we need to learn and improve things as we go.”
So why now?
So one might ask: why roll these changes out now if there isn’t clarity on what is coming next?
There’s probably a degree of Defra having to show that, post-Brexit (however that pans out), there is a tangible change ahead. The Defra documents contain more than a few digs at the European Union and how everything will be better once we’re out of it.
However, seeing as the RPA will continue to be responsible for administering the various schemes and payments, I am afraid I have my doubts. But let’s set that to one side for the moment.
The ‘Known unknowns’
So, following these pronouncements from Defra, what can we definitely say is going to happen – and what are the big unknowns?
Basic Payment Scheme
Firstly, let’s look at BPS. From 2021, the amount farmers receive from BPS will reduce. The annual reduction in BPS each year will depend on the current amount received, but by 2024 everyone is basically looking at getting half of what they get now. After 2027, there will be no direct payments from BPS.
The AHDB calculator is a very useful tool to show exactly how your payment will reduce over time – just input your total payment for 2019.
Environmental Land Management
A reduction in BPS represents a big financial hit for most farms. So, what are the options for increasing income through other means? We’ve all heard some detail about the Environmental Land Management (ELM) scheme. Indeed, SWFC is involved in one of the existing ELM test and trial projects (LINK TO SOIL SCANNING) and there have been numerous other Defra-funded ELM projects over the last year or so.
What we do know is that ELM will have different “components” [we’re not allowed to call them “tiers” any more] and that there will be different potential levels [tiers?] of involvement – and, presumably, different payment rates to go with these.
The three components of ELM will be Sustainable Farming Incentive, Local Nature Recovery and Landscape Recovery:
Sustainable Farming Incentive
Sustainable Farming Incentive (SFI) is the universal scheme that will be open to all farmers with the stated aim that it will be attractive and straightforward so as to get as many farmers as possible to engaged with some kind of environmental programme. To us, it sounds like the “broad and shallow” approach that underpinned the old ELS – but as there’s not a lot of detail around what it will entail we can’t say for certain. One point is that it will potentially be possible to have an SFI agreement alongside an existing Countryside Stewardship agreement – although as you can’t be paid twice for the same actions, it will very much depend on the SFI options and payments as to whether this is a potential way to increase income through environmental management. SFI is supposed to be available from 2022 – but we won’t have more details until June next year.
Local Nature Recovery
Local Nature Recovery is the next component of ELM. This is the scheme that is intended to replace Countryside Stewardship (CS), which will continue to be available until 2024. One useful piece of information is that those in CS agreements that start after January 2021 and who subsequently get accepted for an ELM scheme should be able to withdraw and transfer to the new scheme with no penalty. In other words, if your CS agreement is coming up for renewal next year you don’t have to hedge your bets and wait to see if ELM might be better: you can go ahead with CS and potentially swap to ELM later.
Landscape Recovery is the final ELM component, which is expected to be more targeted to specific areas to support fundamental changes to land use – including rewilding. But we’ll all have to wait for more information to see what that might look like and where it is intended to be applied.
Other points of interest in the Defra documents are the Lump Sum Exit Scheme, designed to help farmers who wish to retire by offering a lump sum in place of any further BPS payments.
Due to be launched in 2022, Defra’s intention is that this scheme would result in new opportunities for new entrants. But with land prices as they are, it’s very hard to see how this policy will not just lead to greater consolidation of existing large farms.
There is no doubt that there are some interesting possibilities on the horizon with new payments for farmers who deliver sustainable farming solutions.
As a vision and a principle, this is obviously all very welcome.
But without further information and practical detail it is extremely hard to plan for. What we do know is that BPS is going to start reducing from next year; and for most farmers with existing CS agreements rolling along, this inevitably means a reduction in farm income.
We hope that ELM opportunities and payments will match Defra’s vision. But for the moment, as so often in the past, it’s a case of taking a long hard look at your business and assessing what you need to do to survive.
Have a read of Tom Tolputt’s recent blog and his article in the Farmers Guardian on potential strategies to help improve overall farm resilience.
Many other organisations have commented on Defra’s plans. You might find the following articles of interest: