The Plan for the Agricultural Transition
The future of agricultural subsides after the UK has left the European Union has been debated extensively following the Referendum. On November 30th 2020, George Eustice, Minister for Defra, announced the Agricultural Transition Plan to outline the post-Brexit agriculture policy for England. The Environmental Land Management (E.L.M.) scheme will provide the core of post-Brexit agricultural support. There will be three components of ELM, which are explained in greater detail below, and the Government has structured the transition into key phases:
- This year
- 2022 to 2023
- 2024 to 2028
Public Money for Public Good
As mentioned, the core of the new support system will focus on the ELM scheme, established by the Agriculture Act. At the heart of ELM is the concept of public money for public goods. The Government has completely changed the focus of agricultural support and placed the environment and sustainability right at the heart. Essentially, farmers and land managers will be paid to deliver environmental benefits. The full list of what the Government consider to be public good was outlined within the Agriculture Act as;
- managing land or water in a way that protects or improves the environment;
- supporting public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment;
- managing land or water in a way that maintains, restores or enhances cultural or natural heritage;
- managing land, water or livestock in a way that mitigates or adapts to climate change;
- managing land or water in a way that prevents, reduces, or protects from environmental hazards;
- protecting or improving the health or welfare of livestock;
- conserving native livestock, native equines or genetic resources relating to any such animal;
- protecting or improving the health of plants;
- conserving plants grown or used in carrying on an agricultural, horticultural or forestry activity, their wild relatives or genetic resources relating to any such plant;
- protecting or improving the quality of soil.
The new ELM scheme
Many of the details for what ELM might look like is still unknown. There are still significant levels of ambiguity over what will be covered and how those funds will be apportioned. We’re hopeful that Eustice will provide additional detail in the coming months so that farmers are better able to plan for their future. However, what is clear is that it will be one of the biggest shake ups of the UK agriculture sector in a generation. Here at Wilson Wraight we are tracking the progress of the development of ELM closely to ensure that we are best placed to advise our clients of the changes.
What we do know is that ELM will be made up of three components:
Sustainable Farming Incentive (SFI)
The first component (previously known as Tier1) is the Sustainable Farming Incentive (SFI). SFI will pay for environmentally sustainable land management actions that all farmers can do. It will be designed to be the most accessible route to funding. The government will publish details of the scheme, what it will pay for and how to get involved by June 2021. We therefore hope to be able to update you further in the summer.
Local Nature Recovery
Previously known as Tier2, the Local Nature Recovery will pay farmers and land managers for actions that support local nature recovery and deliver local environmental priorities. Government are still trying to identify the best method to do this, but, in principle, the idea is that this funding stream will help to target actions within a specific area to address a key concern. It might be nitrogen pollution in the Wye Valley or soil erosion in the Fens. Land managers within those areas will receive additional payments to tackle that specific issue, in addition to their SFI payments.
The last funding stream is Landscape Recovery, which was previously known as Tier3. This will involve bespoke agreements to support long-term, land-use change projects. While remaining a controversial option, rewilding might be considered under this stream. Pilots for Landscape Recovery projects will begin between 2022 and 2024, and the Government plan to make the full scheme available from 2024.
Collaboration and integration
While each of these funding streams have been designed separately and will likely require separate applications, the idea is that they will compliment and augment each other. In a similar manner, while individual land managers will apply for their ELM separately, they will be encouraged to come together and work collectively on the solutions. The idea, particularly with the Landscape Recovery and the Local Nature Recovery streams, is that if farmers work together to fix a problem, there will be a higher chance of success. However, bringing people together and identifying a workplan to deliver that collaborative approach can be challenging. Farmers are busy enough without having to also act as a professional facilitator. That’s where we come in. Wilson Wraight is well-placed to help guide and support that process, so our clients are best placed to benefit from this approach to funding.
What happens this year
In 2021, the government will start the slow but steady transition away from CAP that will take place across the next 7 years. This year, the Government will begin to reduce Direct Payments, beginning with a 5% reduction. This money will be ringfenced for schemes, grants and other types of support for farmers to manage land and their businesses more sustainably. To design the ELM scheme effectively, the Government has been conducting tests and trials on various aspects of the program. These trials will continue, and Defra will also start a National Pilot of ELM scheme too – expected in the Autumn with applications for the SFI pilot opening in June. This year, the Government will also provide funding through the Protected Landscapes bodies to support farmers, particularly upland farmers (75% of whom live and work in Protected Landscapes), to make improvements to the natural environment, cultural heritage, and public access.
2022 to 2023 targets
The government will continue to reduce total spend on Direct Payments by around 15% in both 2022 and 2023. In 2022 they will start rolling out some core elements of ELM. The Sustainable Farming Incentive will support sustainable approaches to farm husbandry to deliver for the environment, such as actions to improve soil health, enhance hedgerows and promote integrated pest management. During 2022 and 2023, more funding will be made available within the legacy Countryside Stewardship scheme, which is currently open. The administration of the scheme will be simplified further and will seek to increase participation rates so that more people and land areas can benefit from being part of the scheme.
2024 to 2028 targets
The full roll-out of the three components of ELM will be in late 2024. By the end of 2024, the Government anticipates that BPS will have reduced by about 50%. In 2024, following formal consultation, the government plan to delink Direct Payments from the land. They will offer lump-sum exit payments to farmers who may wish to leave the sector. They will then phase the residual payments out, with the last payments made in 2027. All new Countryside Stewardship agreements starting after 2024 will be managed through the new ELM scheme.
While we still await additional detail from Defra on the specifics of the scheme, the overarching framework from ELM is taking shape. No doubt the transition will be complicated, and at times possibly painful, however Wilson Wraight is here to support you. If you would like to discuss the impact to your business, please get in touch.