Jeremy's Blog 21st January 2022: Focus of ELM

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 20th January 2022

With the Commons Public Accounts Committee asking DEFRA how its proposed environmental schemes might affect food production in England and similar arguments elsewhere in the UK, these schemes should be put into some perspective.

DEFRA has set out the broad outlines. As money is released from Basic Payment, 10 per cent is to support productivity improvement and 90 per cent goes to buy environmental change on the ground with “public goods”. With the revised Countryside Stewardship scheme as a bridge, interim schemes like Farming in Protected Landscapes and the first steps of the Sustainable Farming Incentive (SFI), the new schemes are to run from late 2024, funded equally between:

• SFI – environmental measures undertaken while farming
• Local Nature Recovery (LNR) – “locally tailored” measures alongside farming including habitats, woodland creation, peatland restoration and flood management
• Landscape Recovery (LR) – habitat creation over areas between 500 and 5,000 acres, usually with collaboration and to involve private money.

DEFRA’s aims to have 60 per cent of soil managed under these schemes by 2030 and for LNR and LR to create or restore 300,000 ha of wildlife habitat. That is just 3.3 per cent of England’s 9.2 million ha of farmland. Not all of that need be taken out of farming but will be joined by 10,000 ha a year of woodland and peatland restoration.

As voluntary schemes they are likely to attract less productive land though lowland peat will be a challenge. By contrast, set-aside, required of almost all arable farmers, took up to 600,000 ha (at one point 16.5 per cent of arable land) with possibly marginal effects on production.

Financially:

• Basic Payment will have gone from all farms by 2028 – delinked from farming in 2024
• SFI with 30 per cent of the money is open to all – DEFRA’s figures might imply a take up over 55 per cent of land
• LNR and LR would focus 60 per cent of the money on blocks and parts of farms in chosen areas, perhaps less than 5 per cent of farmland
• SFI, LNR and LR are to be priced to be attractive but not to crowd out private money (such as biodiversity gain deals) and will have costs.

In short, other factors look more material. For most farms the real need is to look hard at the business as Basic Payment goes and use the Transition Period to manage change. The new schemes will be an option, not salvation.