One of the questions we are often asked is what will happen to farm subsidy payments and when should we expect the shift in farm support to begin? A timely question given the fact that the Agriculture Bill will complete its remaining stages through Parliament on 13th May.
In England, the Basic Payment Scheme subsidy payments will start to be phased out from 2021 until the final payment in 2027 – this is referred to as the ‘agricultural transition period’. We are still unaware of exactly how this phasing out will occur or how quickly payments will drop, but we do know that payments will be decreased in 2021 by a percentage which is dependent on the amount of income the recipient receives. This is demonstrated in the table below:
|Direct payment band||Percentage reduction|
|Up to £30,000
|£30,000 – £50,000
|£50,000 – £ 150,000
|£150,000 or more
Further changes during this agricultural transition period will be introduced such as ‘delinking’ or lump sum payments. De-linking would mean applicants receive payment without the need to own land or payment entitlements. This would not be optional, but the aim is to simplify the process of receiving payments so that recipients can focus on running their business with greater flexibility. De-linking could take place from 2022 at the earliest. Alternatively, farmers will have the option to choose to take a lump sum payment which would help them invest in their business, retire or pass the farming operations on to younger successors.
The Environmental Land Management Scheme (ELMS) pilot will begin in late 2021 with an aim to start the new scheme in 2024 / 2025. DEFRA are encouraging individuals to look into the opportunities available through the Countryside Stewardship Scheme as this could help ‘bridge the gap’ for income between the phasing out of BPS and introduction of ELMS. There will also be an opportunity to terminate the CS agreement without penalty if you can secure a place in the new ELMS.
At Brooks Leney, we keep up to date with the latest government publications to ensure we are well placed to advise clients on their business, both now and in the future. If you would like to chat about how the Agriculture Bill is going to impact on your business, and what you can do to minimise any impact, do give one of our land agents a call.