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Ag Bill: Use transition period to future-proof farm businesses

Farmers have been urged to use the phasing out of payments to prepare their business for the future


Alex   Black

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Alex   Black
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Farmers need to act now following the publication of the Agriculture Bill, now they have details of what post-Brexit policy and payments should look like.

 

The Central Association of Agricultural Valuers (CAAV) said the new Agriculture Bill has ‘fired a starting gun’ for English farmers to manage post-Brexit changes.

 

With BPS to be phased out from 2021 to 2027, CAAV secretary and adviser Jeremy Moody encouraged farmers and their advisors to review their business, consider how to handle any erosion of margins and make changes.

 

Payments

 

He expected BPS would be cut by 5 per cent in 2021 with those receiving larger payments seeing cuts of up to 25 per cent.

 

“This will release money for new land management schemes – although environmental payments will not replace that loss in margins,” he said.

 

He added this meant farmers needed to plan ahead, including controlling costs or changing enterprises, winning planning permissions and manage succession.

 

“Leaving it too late will see the business on the receiving end of change, not managing it,” he said.

 

“The task is to find how best the business and the family can achieve and retain a financial margin in a more commercial and challenging world.”


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He added after a period of great uncertainty farmers ‘can now lay solid and effective foundations’ for the future, replacing ‘income support with improved commercial viability’.

 

Future-proof

 

Cheffins associate Katie Hilton said whilst many elements of the Bill would be supported by many, parts of the new schemes left ‘much to be desired’.

“Whilst sustainability and protection of the environment is essential, farmers still need to have workable parameters to be able to meet the food production levels needed for a growing population,” she said.

 

“Whilst delivering ‘public goods’ is a popular part of the new bill, food production needs to remain as one of the cornerstones of the farming industry.”

 

She said the Rural Payments Agency had been ‘unfit for purpose’ for many years so any improvement on the process was welcome, however it needed to be followed ‘followed with a commitment to ensure a pragmatic and fair deal for agriculture’.

 

And de-linking payments from the requirement to farm would give elderly farmers ‘a golden handshake’ which she hoped would open opportunities for new entrants as succession-proofing and delayed retirements had long been an issue.

 

“We would advise farmers to make the most of the new funding opportunities within the environmental land management contracts and to ensure that they prepare over the next nine years to 2027,” she said.

 

“Ministers have refused to specify how much money farmers will receive under the new Bill, so we would also recommend that any diversification projects are prioritised and succession-proofing is considered well ahead of time.”

 

Dairy co-operative Arla welcomed the announcement and said it was pleased with the seven year transition period.

 

Arla

 

Ash Amirahmadi, Managing Director, Arla Foods UK said: “This is what we called for in our submission to the Government consultation which preceded today’s announcement and will give certainty to farmers, allowing them to plan for the new environment.

 

“It is fantastic that so many of our farmer owners have contributed to the consultation and had their say.”

 

He added properly structured policies could deliver benefits for the environment and increase profitability and productivity and was encouraged by the overall objective of the new regime being to secure ‘practical gains for farmers that help them become more profitable and reduce their environmental footprint’.

 

Mr Amirahmadi said it was important the new Environmental Land Management system did not lead to incentives which only deliver public goods whilst neglecting innovation and increased productivity.

 

“We are therefore keen to understand the measures to increase productivity and invest in R&D that the Government has proposed,” he said.

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