The Department for the Environment Food and Rural Affairs together with Natural England and the Rural Payments Agency have written a paper on the way farming is changing and Lester Williams, partner at Symonds & Sampson LLP, has read it from cover to cover.
'The most striking part of the pamphlet is the tone' says Lester, 'there is no suggestion that the UK might stay in the EU and there is a very clear message - ‘Once we have left the EU and once our Agriculture Bill has been passed by Parliament.’ The vision and ideals are a strong message, a cynic could call it electioneering!'
The government want to make sure there’s a gradual transition from the current system to the new, and they plan to make changes over a seven-year period so that farmers and land managers have sufficient time to adapt and prepare.
They plan to phase out Direct Payments in England. In doing so, the relationship between government and farmers will start to change as we move away from a subsidy-based approach to a more business-like partnership.
The main plans are:
Phasing out Direct Payments - The government plan to phase out Direct Payments in England from 2021 to 2027 and in the first year, the biggest reductions will be applied to the higher payment bands:
Direct Payment band** Maximum reduction
Up to £30,000 5%
£30,000 - £50,000 10%
£50,000 - £150,000 20%
£150,000 or more 25%
** For example, for a claim worth £40,000, we will apply a reduction of up to 5% to the first £30,000 and up to a 10% reduction to the next £10,000.
Delinking - The plan is to ‘delink’ Direct Payments from the requirement to farm the land in 2021, and they plan to make these payments regardless of whether the recipient chooses to continue farming or not.
The delinked payments could be used in any way – for example, to invest in improving productivity, to diversify the business or to retire from farming. This should help to provide more opportunities for new entrants, and existing farmers wishing to expand, or to buy or rent land.
Lump sum - They are also looking into the option of offering farmers a one-off lump sum in place of any further Direct Payments they would have been entitled to receive. They plan to run a consultation with farmers later in the year to look into how this could work best. Regardless, the earliest we’d offer the lump sum would be 2021.
We are not sure how these payments would be treated for tax purposes.
Countryside Stewardship - Under current plans, new Countryside Stewardship agreements will continue to be available in the first few years of the agricultural transition period.
They will ensure there is a smooth transition from Countryside Stewardship to the new Environmental Land Management (ELM) scheme.
Transparency in the supply chain - The government want to give farmers and producers better access to data: enabling those who produce our food to make more informed, market-driven decisions, and equipping them in their negotiations with processors and retailers.
They will also plan to publish, maintain, and enforce statutory codes of practice, which will help farmers to be confident that they are receiving fair treatment in their business dealings
Tree and plant health - In recognition of the valuable environmental benefits provided by our trees, woodlands and forests, the government are reviewing the existing package of tree health grants designed to protect our treescape from the ever-increasing threat of pests and diseases.
Animal health - They acknowledge that farmers dedicate a huge amount of energy to caring for their animals. That’s why they are working in close partnership with farmers and vets to develop a new approach to preventing endemic disease and improving the health of livestock.
Animal welfare - They will build upon our world-leading animal welfare standards after we leave the EU. They will do this in part by developing publicly-funded schemes for English farmers to provide animal welfare enhancements beyond the regulatory baseline – ones that are valued by the public and not sufficiently provided by the market.
It is fascinating to see their plans and we will be following what happens with great interest especially as 31 October comes ever closer.
For further information, please contact Lester Williams at our Sherborne office 01935 814488