Subsidy plans confirmed

Farmers in England are set to lose a significant amount of the funding they currently receive under the Common Agricultural Policy (CAP) under plans laid out by the Government on 30 November.

Defra’s, Agricultural Transition Plan 2021 to 2024, outlines a future where farmers will be paid to improve the environment and reduce carbon emissions as well as improve animal health and welfare.

Under the plans, direct payments to farmers will be gradually phased out over a period of time, with reductions in 2021 of 5% on the first £30,000 received, and after this, 10% reduction between £30,000 and £50,000, 20% reduction on £50,000 to £150,000 and finally, 25% reduction over £150,000.

These changes continue each year between 2021 and 2024 with the aim of the government for legacy BPS payment to have reduced considerably by the end of 2024.

By the end of 2024, farmers who currently receive less than £30,000 per year under the European Union’s Basic Payment Scheme (BPS) will see their payments reduced by 50 per cent by 2024, but farm businesses that currently receive BPS of between £30,000 and £50,000 will see their payments reduced by 55 per cent and those receiving between £50,000 and £150,000 will see their payment reduced by 65 per cent.

The Government will consult formally on plans to delink Direct Payments in 2024, with the intention of offering the optional lump sum exit scheme payments in 2022.

Delinked payments will entirely replace BPS for all farmers. Progressive reductions will be applied to each farmer’s total BPS payment value, including any young farmer payment.

Farming groups have been pushing for a gradual reduction in CAP payments, as many farmers are dependent on the payments to remain profitable. However, farmers are able to utilise current countryside schemes to help offset the reductions in their upcoming BPS payments.

The Government does have a system for subsidies called the Environmental Land Management (Elm) scheme, which will largely be funded by the savings from reducing direct payments, but this will not be rolled out until 2024 and details of payments under the scheme will not be available until next year.

For help and advice on matters relating to the agriculture sector, contact our team at Milsted Langdon.

Posted in ARA.