Jeremy's Blog 13th January 2023: Countryside Stewardship Capital Payments Uncertainty

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 12th January 2023

DEFRA’s policy and operational decisions are now coming in fits and starts, not yet catching up with what many are seeking.

December saw the announcement that Countryside Stewardship, already with some 35,000 agreement holders, would be developed to meet the larger land use objectives and local priorities previously set for the Local Nature Recovery scheme, which was not going to be seen at all until late this year. The proposed and demanding environmental targets were largely confirmed, setting the framework for policy on water quality, biodiversity and other goals.

At last week’s Oxford Farming Conference, the minister Mark Spencer set out a “front foot forward” account of government policy and announced:

• a management supplement of up to £1,000 a year to recognise transactions costs and overheads for SFI agreements (not Pilots nor, with its limited demands, the Moorland introductory level), perhaps in reality to make it more attractive especially for smaller applicants as the willing buyer offers more to attract take up
• increased revenue and capital rates for Countryside Stewardship payments. The welcome revenue payments seem to implement the full rates calculated in late 2021 and to apply to existing agreements as well as the ones being applied for. The new capital rates are only for new agreements. Neither apply to HLS or, where relevant, some FiPL agreements.

While any such announcement naturally leads to new questions, the Countryside Stewardship one, especially on capital rates, has immediately led to a shoal of very practical questions which it does not answer. We understand the need to announce what can be said and to do so ahead of this year’s application window. We understand that breaches of the confidentially of some discussions later last year have made ministers more wary of the prior conversations that could have eased this. But too little has been to inform clients with proposed capital works, creating what may yet be unnecessary concern and work for them and the RPA.

The CAAV and others have, in consequence, have been pressing DEFRA and the RPA to clarify matters and fill the gaps in the briefing. Our aim is to help members advise clients in making sensible decisions, so that they do not find later that they have acted too quickly against their interests

The new rates, notably for new hedgerows, lead to questioning the £20,000 payment ceilings and other thresholds. If those stand, then only half as much hedgerow can be planted.

Those immediately unsettled are:

• holders of agreements in place last year but with capital works still to do
• holders of agreements starting this New Year without time to start capital works

with both wondering, where the capital element is significant, whether to hand in their agreements and apply for new ones and

• those who just been offered new agreements but not yet accepted them
• those who have applied but not yet been offered an agreement.

wondering whether to start again. There may be different answers for each. We are working to get more detail on such points as soon as feasible to help advice and decisions.

However and as the CAAV said at our successful meeting at Oxford, the direction of policy is clear for farmers to set their course. The reality of the move from area payments to an unsubsidised sector will be brought home when de-linking is spelt out to over 80,000 English farmers in this last year of the Basic Payment Scheme as it has been known.