Environmental Land Management Scheme

Brexit is the word of the moment that we are probably all a little tired of hearing. However its impact on agriculture and farm businesses must not be overlooked.

Currently, the Basic Payment Scheme will continue largely unchanged for 2019 and 2020 with potentially some simplifications. However, from 2021 we could enter a transition period, where direct payments will be ‘delinked’ from the requirement to farm the land and could be phased out over a period of 7 years. It may be possible to withdraw a lump sum instead of the annual transition payments, which may provide opportunity to make investments or restructure.

The aim is to introduce an Environmental Land Management Scheme (ELMS) in 2025 to still provide agricultural funding. However, this will likely be more environmentally focused, concentrating on delivering;    

• Clean air
• Clean and plentiful water
• Thriving plants and wildlife
• Protection from and mitigation of hazards
• A habitable climate
• Maintaining and enhancing beauty, heritage and engagement of our countryside.

There are currently ‘payment by results’ trials being conducted, as well as mention of capital grants. The government would like the scheme to be cost effective and financially beneficial for farmers, as they want participation. However, it is unlikely UK agriculture will continue to receive existing levels (£3.3bn) of funding.

Defra stated that the majority of cereal farmers would need to reduce costs between 1-30% to breakeven without direct payments. Therefore, with so many external unknowns, it may be time to start looking internally. The next two years offers a window to evaluate the current business model and put in place strategy to ensure your business is robust and sustainable for the future.