Farming is Changing

Are you ready for change?

The Defra announcement on 30 November of the “route map” for the Agricultural Transition Plan didn’t contain a great deal of information or detail, but it reminds us that change is happening and soon. And with the announcement come options that some businesses might want to consider, so now is the time to start thinking and talking about the future for your farm.

From next year’s BPS, payments that will be made this time next year, the transition to the withdrawal of direct support will begin. The BPS will, in 2024, be replaced with ELMS, the Environmental Land Management Scheme, and as the transition period progresses, the value of direct payments is set to decrease on a sliding scale. Payments will also be “delinked” from production and land in 2024, meaning that the farmer will not have to farm the land to claim the payment.

Defra tells us that as direct payments decrease, funding and support will be moved to different and more targeted schemes, including ELMS, perhaps funding for tree planting, slurry store upgrades, R&D and innovation grants and a new entrants’ scheme.

Defra has also announced a lump sum “exit” scheme, to operate in 2022 only. This could allow farmers to leave the industry before the full effects of the reduction in payments is felt and before the ultimate end of support in 2027. However, it seems, at the moment, that this scheme will only be available in 2022, so time is short for such momentous decisions to be planned for and made.

Along with the undercurrent of issues facing the whole industry, the transition to ELMS and the eventual end to farming support, the implications for tenant farmers in all this are especially important.  Not only are rents due on land and buildings, but tenants face the additional challenges of farming within the constraints of their tenancy agreements, including restrictive clauses and long notice periods, and reduced borrowing potential because of lower asset values.

Defra has said that it will make changes to payments and schemes gradually, amending policies if they don’t work as intended and has pledged to keep the same amount of support available (about £2.4 billion) as the schemes change. But the changes mean challenges to the way we work, the way our businesses are funded and what is expected of farmers and growers by way of delivering “public good”.

But change is happening and LRSN’s volunteers and staff are on hand to help you and your family navigate the challenges ahead. There will be some tough discussions to be had and some serious and life-changing decisions to be taken, but the time to begin the process is now.

As US President, John F Kennedy said: “Change is the law of life and those who look only to the past or present are certain to miss the future.”

Download the Defra Farming is Changing document: Farming is Changing (publishing.service.gov.uk)