Basic Payments to reduce by up to 25 per cent

The Department for the Environment, Food and Rural Affairs (Defra) has confirmed that as part of the Agriculture bill farmers in England will see their Basic Payment Scheme (BPS) payments reduced by between 5% and 25% in 2021.

The confirmation appears in Defra’s recently published Farming for the Future: Policy and Progress Update report, which outlines its plans for the next seven years (2021 to 2027).

Farmers who currently claim up to £30,000 will see their payments reduced by 5 per cent, with further reductions for payment falling in bands above that amount. The bands are:

  • A 5 per cent reduction for direct payment bands up to £30,00
  • A 10 per cent reduction or bands between £30,000 and £50,000
  • A 20 per cent reduction for bands between £50,000 and £150,000
  • A 25 per cent reduction for bands of £150,000 or more

This means that from next year, for a claim worth £40,000, a 5% reduction would be applied to the first £30,000 and a 10% reduction to the remaining £10,000.

The forthcoming Environmental Land Management system (ELMs) scheme will be piloted from 2021, with the initial ambition to have 1,250 business enter the pilot when it is launched, building to 15,000 by the end of the pilots in 2024.

The scheme will pay farmers for environmental services and benefits. These benefits include improved air, water and soil quality, climate change mitigation and increased biodiversity.

Defra also detailed plans to “delink” direct payments from the land for all farmers and will also look to offer farmers a one-off optional lump sum payment in place of direct payments.

Martin Johnson, Manager at Milsted Langdon, said: “Farmers need to be aware of the reduction in the BPS payments, now that Defra has confirmed the plans for the next seven years in its latest report. The change will also contribute to the introduction of the new ELMs scheme with more of a focus on environmental work, which could provide new opportunities in the agricultural sector.”

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