The government have launched their plan to deliver a better, fairer farming system in England from 2021. New measures will transform the way we support farmers, in the most significant change to farming and land management in half a century.
The publication of the new framework comes a few weeks after the government’s landmark Agriculture Bill passed into law, helping farmers to make the most of the opportunities available outside of the EU. Now that we have left the EU and are no longer bound by the Common Agriculture Policy, the government has been free to design a new agricultural policy that works in favour of British farmers.
From 2021, the CAP Basic Payment Scheme (BPS) will be replaced gradually by new measures. The changes will come into force gradually over a period of seven years to help farmers adapt and prepare for the new system. The government remains committed to its manifesto commitment to guarantee the current annual budget for every year of this Parliament. The new system will use this money differently, however, to reward farmers and land managers for sustainable farming practices. By 2028, it is the intention that farmers will be able to produce food both sustainably and profitably without subsidy, while taking steps to improve the environment and animal welfare at the same time.
There will now follow a period of engagement with farmers, land managers and other stakeholders to finalise the design and operation of the future system to ensure they work for everyone. The final design for the future Environmental Land Management scheme will continue to evolve, for example, and adapt to lessons learnt through co-design exercises, such as ongoing tests and trials, as well as the National Pilot.
Further detail on the National Pilot for Environmental Land Management and the government response to the national conversation around the new scheme that took place earlier this year are due to be published early next year.
The ‘Path to Sustainable Farming’, published today, sets out more detail on the changes and what they mean for farmers.
Key measures include:
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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.
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Investing in improving animal health and welfare as part of our sustainable farming approach. This will initially focus on controlling or eradicating endemic diseases amongst cattle, pigs and sheep.
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Direct Payments will be reduced fairly, starting from the 2021 Basic Payment Scheme year, with the money released being used to fund new grants and schemes to boost farmers’ productivity and reward environmental improvements.
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Launching a Farming Investment Fund, which will support innovation and productivity. This will open for applications next year and will be used to offer grants for equipment, technology and infrastructure for the future.
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Simplifying and improving existing schemes and their application processes further from January 2021 to reduce the burden on farmers, and we will take a modern approach to regulation, cutting unnecessary red tape for farmers and working together with industry to design a more targeted regulatory system.
Direct Payments
Direct Payments currently paid through the CAP's Basic Payment Scheme offer poor value for money and will be gradually phased out. They are based on the amount of land owned, causing inflated rents and pricing out new entrants to the market.
The money saved will go back to farmers through the Environmental Land Management scheme and other funding grants to help farmers to boost productivity.
This document sets out how Direct Payments will be reduced fairly over the next four years, with the biggest reductions made to the higher payment bands. Further reductions will be applied until the last payments are made in 2027.
In order to ensure that farmers are adequately supported throughout the transition, a farming resilience programme will be made available in the first three years of the agricultural to help those most affected by the phasing out of Direct Payments.
The document also sets out the various steps that have been taken to simplify the Basic Payment Scheme for next year, in order to reduce the burden on farmers as they focus on transitioning to the new system. This includes important changes to cross-compliance, such as an increased use of warning letters and offers of advice over farmers receiving a penalty as the default response to a breach of the rules.
Defra will consult formally on a proposal to offer lump sum exit payments to farmers who may wish to leave the sector and plans to delink Direct Payments from land for all farmers later in the agricultural transition.
Environmental Land Management
The new Environmental Land Management scheme has three components:
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the Sustainable Farming Incentive, which will support environmentally-friendly approaches to farm husbandry, such as actions to improve soil health, hedgerows and integrated pest management;
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Local Nature Recovery, which will pay for creating, managing or restoring habitats, natural flood management and species management; and
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Landscape Recovery, which will focus on landscape and ecosystem recovery through projects looking to achieve large-scale forest and woodland creation, peatland restoration, or the creation and restoration of coastal habitats, such as wetlands and salt marsh.
Farmers and land managers will be able to decide which element is best-suited to their land.
Work to design the future scheme in collaboration with farmers and land managers will continue next year, with the National Pilot expected to launch in late 2021, which will involve up to 5,500 farmers over a three-year period. This will ensure that the new scheme helps our farmers and land managers, as well as delivering greener, cleaner landscapes and reversing the decline of some of our most cherished species.
Expressions of interest for the National Pilot are also expected to open early next year.
Productivity
Funding retained after phasing out Direct Payments will also be used to introduce new productivity schemes.
A new Farming Investment Fund will open for applications next year and will provide targeted support for businesses to invest in equipment, technology, and infrastructure that will improve their productivity and deliver environmental and other public benefits.
The two levels for this fund will be the Farming Equipment Technology Fund, which will offer small grants to contribute towards the purchase of a list of specified items and the Farming Transformation Fund, which will provide larger grants towards the cost of more substantial investments in equipment, technology or infrastructure, with the potential to transform business performance.
Eligible investments under these funds may include on-farm water storage infrastructure, robotic or automated technology, items to improve animal health and welfare and equipment for processing agricultural products, which can help farmers to streamline or diversify their businesses.
From 2022, farmers will also benefit from increased investment in agricultural research and development that will enable more farmers and agri-food businesses to drive innovation. This will see farmer-led R&D projects to trial and demonstrate viability of new and existing technologies to address immediate on-farm productivity challenges as well as research into how agriculture can meet its longer term goals to reduce greenhouse gas emissions and achieve net zero. Example projects could be trialling new feed additives or demonstrating the integration of autonomous farm machinery.
Other available support
More funding will also be made available under an improved Countryside Stewardship scheme, which will be an important stepping stone for many farmers ahead of the full roll-out of the future Environmental Land Management scheme, expected in late 2024. Steps will be taken to simplify the administration of the scheme, making it easier for more people to take part and helping participants to springboard into the future scheme.
