Jeremy's Blog 10th December 2021: DEFRA's Developing Policy

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 9th December 2021.

DEFRA has made the third of its Agricultural Transition Plan statements, this time largely on SFI 2022 focussed on soils but also with a larger policy speech. This follows the Plan of November 2020 and June’s announcements on SFI and DEFRA’s payment principles.

This is and should be seen as a pattern of the progressive development, implementation and testing of new policies, with a flexibility possible outside the CAP. No single step unveils the new world, whether to convince green groups or assure farmers, but builds from those before. The plans for SFI 2022 both include lessons from the Pilot applications and lay out how SFI is to expand through to 2025. The approach to the Local Nature Recovery (likely to include peatland restoration and woodland planting) and Landscape Recovery schemes is to come in January. All three are to be in place from 2024, with equal thirds of the money, but then expected to evolve further.

The relationship with private finance is tested with welcome confirmation that land can be in both SFI 2022 and a private environmental agreement such as biodiversity gain. While the payment rates are said to be better than possible in the EU, they are at levels that that might not “crowd out” arrangements in private supply chains.

SFI 2022’s soil testing requirements overlap with those of the Farming Rules for Water, drawing attention to DEFRA only paying for actions above the regulatory baseline.

George Eustice’ speech set the backcloth of “little correlation between successful food production and area-based subsidies”, noting that some of the sectors with greatest self-sufficiency were those least reliant on BPS, that many sheep graziers do not get BPS, and the competitive strength of the top 30 per cent of farmers by gross margins.

Now facing climate change and biodiversity, the English policy would “repurpose” payments to halt the decline in species abundance, reduce greenhouse gas emissions, plant 10,000 ha of trees each year, improve water quality, create more space for nature and ensure a vibrant and profitable industry (with productivity grants schemes recently announced). That would offer choices to farmers:

“The new policy will be optional, but open to all … offer[ing] market-based payments to willing participants in order to incentivise the uptake of schemes on the scale required to deliver the policy outcomes …”.

Farmers would make their own business decisions, choosing which, if any, of and to what extent these schemes suit them or how else they develop their businesses.