Yahoo Finance UK government unveils post-Brexit reforms for English farmers
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The UK government today published an agricultural shake-up for English farmers, which will see direct payments (DP) replaced with a scheme that rewards them for environmental goods.
After Britain left the EU in January, the government took over the responsibility for most fam subsidies. At the moment, it pays farmers under the same system used by the EU.
While the government is still working on its own scheme to support farmers, ministers want to push ahead with cuts to direct payments from 2021.
Changes will only apply to farmers in England as the Welsh and Scottish devolved administrations will decide separately how to allocate their own farm funding.
The plans mean the UK will shift away from the £3bn ($4bn) Common Agricultural Policy, which was considered inefficient by farming groups and blamed for encouraging poor environmental practices.
It vows to “simplify and improve” existing schemes and application processes from January 2021, to “reduce the burden on farmers.”
The government also says that it will take a “modern approach” to regulation by “cutting unnecessary red tape” for farmers and working together with industry to design a more targeted regulatory system.
Under the proposals, the government will introducing the Environmental Land Management scheme to incentivise sustainable farming practices, create habitats for nature recovery and establish new woodland to help tackle climate change.
It will also invest more in improving animal health and welfare as part of the government’s sustainable farming approach. This will initially focus on controlling or eradicating endemic diseases amongst cattle, pigs and sheep.
Starting from the 2021 Basic Payment Scheme (BPS) year, DPs will be reduced fairly, with the money released being used to fund new grants and schemes to boost farmers’ productivity and reward environmental improvements. The biggest reductions will be made to the higher payment bands. Further reductions will be applied until the last payments are made in 2027.
Another change will also see the government launch a Farming Investment Fund, which will support innovation and productivity. This will open for applications in 2021 and will be used to offer grants for equipment, technology and infrastructure for the future.
To ensure that farmers are adequately supported, a farming resilience programme will be made available throughout the first three years of the agricultural transition period to help those most affected by the phasing out of DPs. This will help farmers plan and manage their businesses in the journey to the new system.
The Department for Environment, Food and Rural Affairs (DEFRA) will also consult formally on a proposal to offer lump sum exit payments to farmers who may wish to leave the sector and plans to delink DPs from land for all farmers later in the agricultural transition.
A spokesperson for DEFRA said: “Our future farming policy will create cleaner, greener landscapes, helping build towards the government’s environmental goals and net zero commitments.
“As we phase out direct payments over the seven-year agricultural transition period, we will offer financial assistance to help farmers prepare, and invest in ways to improve their productivity and manage the environment sustainably.”
It comes after, the Agriculture bill was passed into law earlier this month, which sets out how farmers and land managers in England will be rewarded in the future with public money for “public goods” including better air and water quality. The law will help the government with its 25 year “Environment Plan” and commitment to reach net zero emissions by 2050.
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But, the plans could see farmers in England have their direct subsidies cut at least 50% by 2024, the Financial Times reported.
This means that the £1.8bn paid out annually to farmers based on their acreage will be slowly replaced with a scheme that pays for public goods such as clean air, water and improved biodiversity.
This could see farms receiving annual subsidies of £30,000 face 50% reductions, while any amount above that and below £50,000 will be cut 55%. This rises to 65% for any amounts up to £150,000 and anything above that payments will be cut 70%.
Around half of the basic payment goes to just 10% of larger farms, with a third of farms receiving less than £5,000 each. Although all the subsidies will go back into the agricultural industry under several grants and pilot schemes, there are worries over some businesses falling through the gaps during the transition.
Cuts to the payments start from 5% in 2021, but the replacement Environmental Land Management Scheme will not be fully in place until 2024.
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Environment secretary, George Eustice is due to say in a speech to farmers and environmental groups: “We want farmers to access public money to help their businesses become more productive and sustainable, whilst taking steps to improve the environment and animal welfare, and deliver climate change outcomes on the land they manage.
“Rather than the prescriptive, top down rules of the EU era, we want to support the choices that farmers and land managers take. If we work together to get this right, then a decade from now the rest of the world will want to follow our lead.”
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