The first steps in the transition from EU direct payments based on land ownership to rewarding sustainable farming under new land management schemes, as outlined in the Agriculture Act 2020, have begun. From this year onwards, BPS payments will be steadily reduced until they are phased out completely by 2028. In theory, the money saved will go towards developing ELMS, the plans for which are now underway with Defra’s announcement that the recruitment process for the pilot of the first of three environmental schemes, the Sustainable Farming Incentive (SFI), has started.
Transitioning from BPS
There is great deal of vagueness about what the post-transition landscape will look like and this appears, in part, to be deliberate. ELMS is a work in progress and Defra has emphasised the importance of farmers’ buy-in to the three proposed schemes. It has determined that securing this buy-in relies on farmers being actively involved in shaping the schemes so that they work as advertised and are (relatively) unencumbered by unnecessary bureaucracy. Laudable though these aims are, it is likely that, as with any scheme or plan that is developed on the hoof, there will be delays and disappointments.
Therefore, it is unsurprising that some land agents are taking a cautious approach and have been encouraging their clients, not currently in an environmental scheme, to apply for a Countryside Stewardship Scheme. A successful application would guarantee an income stream, helping to bridge any shortfall while BPS is gradually withdrawn and ELMS payments are still pending. It’s worth noting that there will be no barriers to anyone in a CSS transferring across to ELMS in due course. Attention has also been drawn to the use of a CSS to help pay for less productive land which can be viewed as good preparation for the new environmental schemes once they are up and running.
Cross compliance remains with us
Nonetheless, while BPS payments continue, so do the cross compliance rules (which have not changed for 2021). In an effort to simplify cross-compliance, Defra is intending to apply more carrot and less stick to its approach. Following the review by Dame Glenys Stacey in 2018, which advocated greater use of warning letters and more help and advice rather than immediate imposition of penalties, the RPA has stated that it will be taking a more constructive line with those in breach of the rules. This revised approach lays the groundwork for how it wants to deal with compliance in future – focus on outcomes and improvements rather than penalties and enforcement. Finally, Defra has recently announced a consultation on both the delinking of BPS payments from land ownership, currently planned for 2024, and on lump sum payments for retiring farmers, due to start in 2022. Given the lead times most farmers need to plan for retirement, and given the lack of detail on how this will be achieved if the farmer in question is a partner or shareholder in a farming business, Defra will have to get its skates on.
SFI marks the first stage of the Transition Plan
With the ‘what, how and when’ aspects of ELMs still being rather light on detail, news of the SFI pilot, the first of the three environmental schemes outlined in the Agriculture Act (the others being the Local Nature Recovery and Landscape Recovery schemes), provides concrete evidence that the post-Brexit plans for agriculture are beginning to take shape. Nonetheless, the SFI, which is designed to be as ‘attractive and straightforward’ as possible, has already been criticised for its lack of ambition, with its detractors pointing out that it is paying farmers to do what they are already required to do by law.
It is certainly true that Defra has not set the bar that high but, given the scale of what it wants to achieve further down the line, its objective to bring as many farmers on board as possible is sensible. The pilot will be a work in progress with the stated aim to refine the scheme in partnership with farmers to find out what works and what doesn’t, prior to full roll-out in 2022.
How the pilot will work
Farmers in England, who are recipients of BPS, not in an existing agri-environment scheme, and either own or control their land (as tenants with a tenancy lasting until at least 2024) are being encouraged to express their interest in taking part. Defra will invite a representative mix of farm types and locations to apply in June with a view to the agreements going live in October. Defra is anticipating that participating farmers will have to commit to 10-15 hours a month which largely consist of reviewing what they are doing and feeding the results back to Defra, as well as taking part in group ‘learning activities’. For this they, they will be paid (from November) at rates broadly equivalent to those under the Countryside Stewardship Scheme. The pilot will last until 2024.
The SFI pilot is encouraging greater flexibility for farmers, enabling them to choose the elements that best suit their farm and to a standard that is appropriate. For instance, a farmer can choose to apply for intermediate hedgerow standard but an advanced low and no input grassland standard, and the agreement does not have to apply to the whole farm. In order to gauge the effects of applying these standards, farmers are being asked to prepare Land Management plans which will provide the benchmark against which to judge the effectiveness of the agreement.
The NFU is supporting Defra’s efforts to engage farmers in the development of ELMS but is urging it not to make the standards too prescriptive. That will be an interesting challenge given the diversity and complexity of England’s farms: as with education, we know that one size does not fit all but, equally, a plan to suit each individual child / farm, although ideal, is impractical when delivered centrally using central funds. Nonetheless, finding a solution to meet the needs of a majority in one country should be easier than trying to do the same across 28 countries – in theory.