Defra is planning a new ‘stepping stone’ scheme to bridge the gap between the Basic Payment Scheme (BPS) and the new Environmental Land Management (ELM) scheme.
Known as the Sustainable Farming Incentive (SFI), the intention is make some elements of ELMs Tier 1 available during the transition, to help farmers meet their net zero commitments and ensure they do not fall into a funding void.
BPS claimants are expected to have lost half of their payment by 2024, when ELMs is due to be rolled out.
Defra Ministers are also thought to believe it will be difficult to defend agricultural spending in the post-pandemic era if it continues to go towards direct payments, with the manifesto promise to guarantee farm budgets until the end of the Parliament now under threat.
Planning of the SFI is at an early stage, and it is not yet guaranteed to be introduced, but a number of key concerns have already been raised, including where the money will come from, with BPS cuts financing ELMs and new grants.
There are also fears that farmers who have joined Countryside Stewardship or extended their agreements on Government advice may be penalised if they cannot participate in the SFI.
Gail Soutar, chief Brexit adviser at the NFU, said: “There is a real issue there. We certainly do not want farmers to be put off because of uncertainty about what may or may not happen in the future.
“In the past, the Government has recognised early adopters should not be penalised. That is the kind of commitment we need to make sure the Government gives this time around as well.”
Tom Lancaster, head of land use policy at the RSPB, also warned there was a risk that the lack of time available to set up the SFI could mean existing poor management is built into the scheme.
“We would be concerned if Defra turn to the Rural Payments Agency and the discredited CAP IT system to implement the scheme,” he said.
“There is a need to go back to first principles on what delivery arrangements we need for ELM in the long term, and how public money can be used most effectively to secure much-needed environmental outcomes.”
Farmers Guardian approached Defra for comment, but was told there was no update on the SFI yet.
The department had planned to make an announcement on the scheme this month, but the plan was delayed by the hold-up with the Treasury’s Comprehensive Spending Review.