Consider impact of new Agriculture Bill on farm support in England

Posted by LindaStenner on August 18, 2020

Consider impact of new Agriculture Bill on farm support in England

August 18, 2020 at 11:12 AM

Whilst further government consultation and specific details are still awaited for the Agricultural Bill, the new legislation that looks set to reform the agricultural industry, the impact on future farm support in England can still be considered. 

The Bill provides the mechanisms to transition away from direct payments based on land holding to targeted support schemes including  the Environmental Land Management Scheme (ELM) and direct “productivity measures” such as the  current Countryside Productivity Scheme.

“The UK Government pledged to maintain current level ‘farm support’ for the remainder of the current parliament which coincides with the roll out of ELM in 2024,” explained land agent Edward Page of Davis Meade Property Consultants.

“The transition away from BPS will see payments reduce from 2021 to 2027.  ELM may provide a counter balance to this reduction where scheme criteria can be met but the level of ELM claim will be different for each claimant.”

The BPS reductions for 2021 have been announced and details of future deductions are expected later in the year.

2020 Payment

Up to £30,000

£30,000-£50,000

£50,000-£150,000

Over £150,000

% Reduction 2021

-5%

-10%

-20%

-25%

Defra announced 2021 BPS reductions

“We do not expect an additional maximum claim value, or ceiling limit, but the reductions will simply be annual percentage decreases from 2021, with future deductions based on government budgets for coinciding productivity measures and other potential means of support such as lump-sum payments,” Edward said.

“Further counter balancing of lost income can be achieved through a simplified Countryside Stewardship Scheme to run up until 2024.”

A principle part of this Bill is what is referred to as ‘de-linking’ the claim from the land to it becoming a personal right. The exercising and timing of de-linking is at government’s discretion but could come into effect from 2022 or later into the transition.

If exercised, this could mean that a claimant is no longer required to be in occupation of the land to receive the payment. The claimant must only have claimed, and be in occupation per current rules, in the ‘reference year’.  That claimant would then be entitled to the full transition payment, regardless of whether they are farming the full, half, or any part of that land claimed for in that reference year.

“We have seen similar arrangements used before in Wales and Scotland for the allocation of BPS entitlements in 2015,” he said.

“In those cases, the private contract route required proof of agricultural activity in 2013 for right to claim in 2015. If de-linking is approved by Ministers, the announcement of the reference year will be fundamental and, as it was back in 2013, protecting the right of claim now for the next seven years’ payment is point that should be considered now when managing existing and new Landlord and Tenant arrangements.”

There is also an option provision in the Bill for a claimant to apply for a ‘Lump Sum’ payment. This would accumulate the transition payments into one payment to facilitate farm investment and also expediate retirement. Limited details are currently available in terms of eligibility criteria for this payment and the impact on the overall transition budget.

“As we move from a system designed on arbitrary land areas to one that targets public goods including environmental and social benefits, we will be working with our clients to consider the impacts to existing and planned tenancy arrangements from this Michaelmas,” Edward added.

For any further advice please call Davis Meade Property Consultants on 01691 659658 or email edwardpage@dmpcuk.com.

EdwardPage1.jpg

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