UK subsidy changes could hit more than 1 in 5 farmers in first year

UK subsidy changes could “free up £150 million for the environment and other public goods”, a consultation launched today has said.

Agriculture will see a transition period of a “number of years” to help farmers plan for the future; however, it is likely the proposals could see many payments significantly reduced.

Gove told the National Farmers’ Union conference last week that while the proposals would only affect England, he hoped other regions of the UK – which will be given more power over agriculture – would follow suit.

‘Public money for public goods’

The proposals will see money redirected from direct payments to a new system of “public money for public goods” – principally work to enhance the environment and invest in sustainable food production.

Other public goods which could be supported include:
  • Investment in technology and skills to improve productivity;
  • Providing public access to farmland and the countryside;
  • Enhanced welfare standards for livestock;
  • Measures to support the resilience of rural and upland communities.

What are the plans?

However, at the same time, reductions to direct payments to the largest landowners first could free up around £150 million in the first year of the agricultural transition period, which could be used to boost farmers delivering environmental enhancement and other public goods.

A cap of the largest payments could, for example, be applied at £100,000 – which would affect around 2,100 farmers or 2% of recipients.

The progressive reductions option could, in the first year of the agricultural transition, affect around more than one in five farmers – with 19,000 farmers expected to be affected.

Of these, 13,500 would face a payment reduction of less than £5,000 and around 300 farmers, all with claims worth over £200,000, would face a payment reduction of over £75,000. Both of these options could raise around £150 million in the first year.

The consultation seeks views on these options, and whether different threshold and reduction percentages could be adopted, as well as other options.

‘A historic opportunity’

Environment Secretary Michael Gove said: “As we leave the EU, we have a historic opportunity to deliver a farming policy which works for the whole industry.

“Today we are asking for the views of those who will be affected to make sure we get this right so any future schemes reflect the reality of life for farmers and food producers.”

The range of proposals put forward by the Government in today’s consultation, ‘Health and Harmony: The Future for Food, Farming and the Environment in a Green Brexit’, includes:
  • Options for how to gradually phase out direct payments, starting with the largest landowners, whilst developing a new environmental land management scheme.
  • The range of public goods that could qualify for Government funding under the new schemes, such as high animal welfare standards, wildlife protection, public access, and new technologies.
  • Measures to move away from heavy handed enforcement which penalises farmers for minor errors, including a more efficient inspection regime to uphold important environmental and animal welfare standards.
  • New business models and incentives to invest in innovation and new technologies to increase their profitability.

Farm payments in 2019 will follow the existing model, and in the meantime, the Government has pledged to simplify applications for farmers wishing to enter into existing schemes to provide environmental benefits such as Countryside Stewardship.

The consultation will run for 10 weeks, closing on May 8, 2018.