Defra has today published two important new documents on the Environmental Land Management Scheme and future farming policy. Abi Kay explores what they say.
The Government has released very little detail about what the new Environmental Land Management (ELM) scheme will look like since the Health and Harmony consultation was published in 2018.
But today, it has published two important documents.
The first is a future farming policy update, which confirmed cuts to direct payments will begin in 2021 as planned, despite calls for a delay of a year from industry bodies.
From next year, farmers in England will see their payments reduced by different amounts, depending on their claim size (see table below).
The reductions work in a similar way to tax calculations, with a claim worth £40,000 seeing a 5 per cent reduction on the first £30,000 and a 10 per cent reduction on the next £10,000.
|Direct payment band||Reduction percentage|
|Up to £30,000||5 per cent|
|£30,000 - £50,000||10 per cent|
|£50,000 - £150,000||20 per cent|
|£150,000 or more||25 per cent|
During transition, farmers will be able to take payments ‘delinked’ from the land, potentially as early as 2022.
Payments will be made based on a reference period throughout the agricultural transition period – currently due to end in 2027 – and there will be no restrictions on how the money is spent.
Defra is also planning to offer, subject to affordability, the option of taking a one-off lump sum payment to replace all direct support over the agricultural transition.
A future consultation on this will look at whether a maximum payment amount should be set, who will be eligible, how applications will be prioritised to manage affordability if necessary and when and how farmers can apply.
The second paper published by Defra is a ‘discussion document’ on ELM, which shows Ministers are intending to introduce a single scheme with three tiers.
The first tier is designed to be accessible to as many farmers as possible and would pay for good management of nutrients, pests, livestock and soil, as well as field margins, field cover and efficient water use and storage.
Farmers entering tier 1 would, in the short to medium-term, be paid for taking certain actions as opposed to delivering outcomes, but the Government has said it does not want to be too prescriptive and will set up a ‘proportionate’ system of compliance to monitor agreements, focusing first on assistance rather than enforcement tools such as penalties.
Concerns have been raised about the proposal to base tier 1 payments on income foregone and costs incurred.
Farmers would be paid for actions above the regulatory baseline – to be consulted on later – but some of the actions paid for on day one may later become regulatory requirements, and no longer attract funding.
One area this could potentially apply to is nutrient management, as the Committee on Climate Change has recommended making the whole of the UK a Nitrate Vulnerable Zone – a recommendation which Defra will ‘probably consider’.
The objective of tier 2 is to pay for locally-targeted environmental outcomes, taking account of which environmental improvements an area needs as well as which actions can be most successful.
It is anticipated that participation in this tier will require specialist knowledge and support.
Examples of things which could be paid for in this tier include:
The Government is looking at different ways to encourage collaboration under tier 2, and payments are expected to be more results-based than those under tier 1.
The objective of tier 3 is to deliver land use change at a landscape scale, delivering environmental outcomes and making a contribution to meeting legal commitments around nature recovery and net zero emissions.
While under tier 1 and tier 2, farmers can enter into agreements with the Government, in tier 3, Defra is looking at different application models.
One possible procurement approach would see individual or group applications from land managers to deliver specific projects, with a degree of competition in the procurement process.
The department would like as many farmers as possible to have the opportunity to participate in tier 3 projects, which could include:
A range of grants for small and large investments will be provided to farmers to help improve productivity and enhance the environment, with a new scheme opening in 2021.
The initial list of items for which grants will be available will be published when applications open and updated to reflect changing needs.
Suggested items eligible for grants include:
The Government is in the process of developing a new ‘innovation R&D package’ consisting of three strands to encourage farmers and other agri-food businesses to take advantage of cutting edge science.
The first strand will set up state-funded R&D syndicates, allowing farming organisations to work with scientists to develop innovative approaches tackling specific productivity challenges.
Strand two will establish practical, farm-focused projects to encourage adoption of new approaches and technology.
Themed collaborative R&D is the focus of strand three, which will explore strategic, high-priority societal challenges with the potential to transform agricultural productivity over a longer time scale.
Themes include adaptation to climate change and clean growth, integrated farm management, sustainable protein and balanced nutrition and genetics and genomics.