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Tenant farmers already being hit by lack of clarity on BPS phase out
Tenant farmers are already being hit by a lack of clarity on the phase out of the Basic Payment Scheme (BPS), according to the Tenant Farmers’ Association (TFA).
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The group’s adviser, Lynette Steel, warned farmers were unable to run their businesses properly without knowing how much money they would receive over the coming years.
“We continue to be frustrated at the lack of clarity from Defra on the percentage reductions in BPS payments beyond 2021,” she told a Westminster Food and Nutrition Forum event last week.
“I find it really difficult to understand how farm businesses are expected to become resilient and competitive with this level of uncertainty facing us.
“To apply for a tenancy or go through a rent review process, I would have to produce a cashflow plan and budget of at least three years to prove business viability.
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“I cannot currently do this accurately, so you can see the predicament.”
Ms Steel went on to suggest the lack of information would undermine the key aims of the Agriculture Bill.
At the moment, the Bill sets out how direct payments will be cut over a seven-year ‘agricultural transition’, beginning in 2021 and ending in 2027.
Much like taxes, direct payments will be split into four ‘bands’, with different reductions applied to each band (see table below).
|
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 |
For claims worth £40,000, a 5 per cent reduction would be applied to the first £30,000 and a ten per cent reduction would be applied to the next £10,000.
The percentage reductions will be increased during the transition, but no further detail about these heavier cuts is available.
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