Thursday, 11 February 2021
The Agriculture Act – Transition Summary
The Agriculture Act 2020 which passed into law in November 2020, marked the beginning of a legal move from the BPS payment to the ‘public money for public goods’ ethos of the Environmental Land Management Scheme. The Act permits funding for practices geared toward a focus on and upscaling of biodiversity, air and water quality and soil health. The Rural Payments Agency have also shared details of their Sustainable Farming Incentive, as well as the Agricultural Transition Plan for 2021 to 2024. These documents expand upon the de-linking and phasing out of BPS in England, replacing this with ELMS, alongside schemes to improve productivity and technology within UK Agriculture. A summary of the transition plan – what DEFRA want and plan to do can be reviewed here: DEFRA Agricultural Transition Plan for England
The Agriculture Act
The Act has an overarching aim to encourage the reshaping of agriculture in England, in accordance with the Government’s wider environmental goals – especially climate change, through grants and subsidies. policy will interact with and support other aspects of government policy such as the National Food Strategy and the 10 Point Plan. Over the next 8 years, farmers in England will gradually exit the BPS and move towards a new scheme called the Environmental Land Management Scheme (ELMs), with the larger farms moving first.
Environmental Land Management Scheme
DEFRA have subtitled the Environmental Land Management Scheme as ‘the cornerstone of the Government’s new agricultural policy’. The national pilot schemes will begin from October 2021 and run till 2024, following a number of tests and trials, which will commence shortly.
Two additional experimental schemes will run through the transition period, the Environment set up Pioneers running from 2016-2024, Tests and Trials from 2019-24. The Environment Agency, Natural England and the Marine Management Organisation lead on the Environment Plan Pioneers will deliver feedback, strategy and direction for the ELM programme, including assessments based on viability and value for money of the different schemes.
The National Pilot
The National Pilot will then test how the scheme works in practice – as well as the scheme mechanics and application in practice. It is hoped and planned that 1,250 land managers will be involved in experimental schemes during 2022, rising to 8,125 in 2023 and to 15,000 by 2024. With the full ELMS due to launch in 2024, alongside the continuation of the experimental schemes, numbers are hoped to be above 82,000. More detailed information, alongside payment rates, are expected to be shared in June 2021
Basic Payment Scheme
The RPA have released details of updated rules regarding BPS and Countryside Stewardship, with BPS having all three of the ‘Greening Requirements ‘ of crop diversification, ecological focus areas and permitted grassland rules, removed from this year’s application process.
The Two-Year Entitlement Usage will also be removed – although a lag will clearly be in place for entitlements which remain to be claimed for 2019 & 2020. The other major change is an increase in the list exceptional circumstances which fall under a force majeure and an increase from 8 to 15 days for the reporting of such a situation to the RPA. Inspections will continue, but have been streamlined, with operational guidelines published, a list of records which will be required by the inspector will be given sent ahead of the inspection date and penalties have been overhauled. It is hoped that non-compliance penalties will be more proportionate to the office including reduced penalties for small over claims.
A series of progressive reductions of overall claims during the coming years will see BPS phased out completely ahead of 2028. Those looking to surrender their entitlements to the National Reserve, making no further claims, should be able to take advantage of a ‘retirement’ scheme expected next year, where a payment of over £600/ha is expected. The de-coupling payments, which will be known as mandatory de-linkage, due from 2024, will be debated, initially via consultation this summer. There is one route map which sees BPS ending in 2027, with the de-linkage payment (either single or annual) worth £300/ha, open for debate – although little detail exists around this framework at present.
As the overall farming budget remains unchanged, and BPS funding reduces over time, Countryside Stewardship should proportionally receive higher funding amounts Delivery expectations are expected in due course, although the RPA have already confirmed that inspections from now on will focus on assessment of how the environment aims are being delivered, as well as reviewing evidence of previous advice and guidance being put into practice. Agreements in place prior to January 2021 will be assessed against the old criteria underpinned by EU rules. Those agreed since January 21 will be arbitrated by the new criteria. The new criteria allows for the capitalisation of a wider range of items, including water, hedgerows, boundaries and air quality, with Woodland Capital Grants covering woodland management of items such as bracken control and stone wall maintenance.
Applications are open throughout the year for Woodland Management Planning Grants, Woodland Creation Grants and Woodland Tree Health Grants, with some agroforestry, where woody perennials are deliberately used on the same land-management units as agricultural crops and/or animals, compatible with claiming BPS so long as stated conditions are met.
Cross Compliance in 2021
Cross compliance rules remain unchanged for 2021 and continue to be a condition of Countryside Stewardship, and in a continuation of last year’s position, those who enter Countryside Stewardship now, can transfer across to ELMS at the appropriate time without incurring a penalty.
Agriculture Act – Build Back Better
These changes are ambitious. Farmers will be faced with significant challenges – forced to deal not only with new systems but also with transition to wholly-new business models, in some cases, although government is very clear that the short term pain is for longer term prosperous farming industry. The target is to ‘build back better’ and to create a farming framework suited to the twenty first century, with the UK leading Europe, if not the world on climate management, sustainable land use and animal welfare. We are here to help all clients through these changes and create a strong foundation for the framing industry to move forward.