Jeremy's Blog 11th February: DEFRA Filling in the Policy Jigsaw

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 10th February 2022

With this week’s announcements, including the Lump Sum Exit Scheme and De-linking the Basic Payment, DEFRA continues to piece together its English policy jigsaw, each piece with its purpose to be seen in the context of the whole picture of the Agricultural Transition, not just on its own.

Following the increased Countryside Stewardship payment rates and the Farming Transformation Fund’s Improving Productivity theme opening for robotics, automation, ventilation and slurry acidification, applications for Countryside Stewardship have opened, SFI Pilot capital grants been unveiled and interest invited in Landscape Recovery pilots. Strong applications are reported for the Equipment and Technology Fund and the Water Management theme of the Transformation Fund, following the increased numbers entering Countryside Stewardship this year.

The Delinking and Lump Sum announcements offer an early herald of the end of the Transition’s move to unsubsidised farming, prompting change in land occupation to aid productivity.

Delinking, applying to all English farmers after 2023, will see the run-off Basic Payment, perhaps re-labelled, paid whether or not the claimant farms or what is farmed. Entitlements will have no function after May 2023 and the administrative burden is removed as payments shrink away.

The Lump Sum policy has been a long time coming, mooted for some years and the consultation finally held last summer. It is about the exit from subsidised farming, bringing forward all future Basic Payments, surrendering entitlements and transferring away most of the farmland held in 2021, giving opportunities for others and income from any land let out. The applicant is then excluded from Basic Payment, the delinked payment, SFI and some other area-based options but, if wishing, able to farm retained and other land without subsidy and eligible for productivity grants.

Waiting for some clarification from the coming legislation, the CAAV is pleased with changes made for points put with:

• the reference period as close to the application period as possible
• the more flexible approach to farming partnerships easing generational change
• simplifying the area of land that can be retained – 5 hectares of agricultural land on the 2021 BPS form
• the agreement that the payment is to be taxed as capital, seeing this as analytically right but also maximising the useful value of the payment for many.

While it brings no extra money and is capped, the Lump Sum gives a one-off prompt for discussion within families and with landlords about acting ahead of escalating change, using the other resources also available to many. Conversation and good negotiation could benefit all.