Farmers should review their approach to agriculture and consider more environment-friendly alternatives to survive and thrive in the 21st century.
The focus of subsidies is shifting to conservation and nature-focused farming methods alongside food production in the post-Brexit era. The emerging suite of new payments will go some way towards replacing the former regime which paid for simple land occupation.
The new regime is not yet fully developed and, despite assurances from DEFRA, the process could prove complicated. Yet it’s worth negotiating the changing regulatory landscape.
The UK’s exit from the EU and its Common Agricultural Policy (CAP) has led to the phased scrapping of the payments by 2027. The deadline for final applications for the Basic Payment Scheme (BPS) passed on 15 May and farmers in England can no longer rely on the annual “brown envelope” received simply for occupying land.
Payments to farmers in Scotland will continue as before for the time being, pending changes expected at some time from the Scottish Government.
Money from BPS in England is currently being diverted into alternative payments through the umbrella of the emerging Environmental Land Management Scheme (ELMS). The outline of the Sustainable Farm Incentive (SFI) has just been announced and is due to be launched in August. However these payments do require positive input and management by farmers and their advisers.
One of the Brexit promises was a bonfire of bureaucracy, but there will inevitably be a significant administrative burden for each new scheme. Records will need to be kept to show public benefit from public money.
The ability to layer and stack several parallel schemes through both the public and private sectors will also make management and compliance more complex. Both authorities and recipients must navigate the system, and doing so will require some IT skill in mapping, spreadsheets and data input.
Importantly, farmers will need to form their own vision for the future. Every farm should review and take stock of its current benefits in the light of hard-to-predict change. How resilient will it be without BPS, noting recently volatile commodity markets? Last year’s spike in grain and stock prices has been reversed and the legacy of high fertiliser costs will mean a significant decline in the 2023 harvest.
Whatever one’s views on climate change, many expect more extreme weather, with droughts, torrential rain and abnormal temperatures adding uncertainty. Alongside this is a growing enthusiasm for regenerative farming, with many operators addressing perceived risks by changing crop regimes, harvesting from the soil through better use of water and sunlight and reducing reliance on fertiliser and chemical sprays..
Guaranteed area payments enabled and indeed caused many to stand still, shielding them from the impact of so many variables. Farmers should now explore innovative ways to underwrite and develop their businesses. This requires new skillsets, which not all will be willing to develop. Some are activating retirement plans and vacating farmland, either to sell or to relet.
However, for every farmer who retires or goes out of business, there are others waiting. The future is bright for those willing to take on the twin challenges of producing food and safeguarding the environment. Farming and food production must continue, but we should expect a change in the people who’ll deliver a much wider range of public goods.
* Natural Capital: Galbraith’s expert advisers guide our clients in realising value in all land uses – by assessing and measuring natural assets, furthering opportunities in biodiversity net gain, and ensuring stakeholders are rewarded fully for their investment in and contribution to delivering ecosystem services and net-zero outcomes.