The Rural Payments Agency (‘RPA’), the Government body providing financial support to farmers in England, has updated its Sustainable Farm Incentive (‘SFI’) offering. In parallel there have been significant updates to rates under the Country Stewardship (CSS) programme.
This is all part of the ongoing process of transferring the existing subsidy budget away from the Basic Payment Scheme (BPS) which is fast disappearing and will be gone by 2028 as part of the UK’s leaving the EU.
The CSS and SFI schemes overlap in various areas and form two of the three legs of the over-arching ELMS project designed to replace the fast-disappearing BPS payments. They provide financial incentives for farmers, foresters and land managers to look after and improve the environment. They are designed to deliver “public good” from the state’s investment and generally require positive action to comply.
The transitional regime is complex and continually evolving, but our view is that these payments now need to be taken very seriously by all farmers in England.
The general consensus on SFI is that RPA’s collaborative approach seems to be working, with comments taken on board about the unwieldy nature and poor value of the previous version. Various constraints have been removed and additional flexibilities, particularly over timing, have been introduced in the latest iteration, to make the scheme generally more attractive and transparent.
Equivalent programmes are still in development north of the Border, but as yet there is very little detail on which to plan.
The current subsidy pot of about £2 billion is nominally guaranteed until the end of this Westminster Parliament in 2024, but the concern must be that these payments could be vulnerable going forward, particularly in the light of continuing public spending and debt obligations. There is also concern that if the budget expenditure is not achieved, this will send out the message that the farming community do not either want or need it !
All farmers in England would be well advised to look at the current incentives to provide public money while these grants last. In parallel to the financial carrot, there seems to be a tightening regulatory ‘stick’ emerging, particularly in relation to water quality and air quality. We have what could be a fairly narrow window of opportunity to gear up to meet these regulatory challenges and we need to take advantage of it.
Private money is cited as the alternative to public subsidy, but options for these streams are as yet generally ill-defined and currently more complicated to access. It is however reassuring that these can be assessed in parallel to the publicly funded schemes.
Progressive farmers are already developing their own vision of a world without BPS and it has suddenly become easier to cherry-pick grant aid, effectively to underwrite actions which are already being taken such as soil testing, nutrient management etc.
Other farmers, however, may not be so far on in their thought processes, but need to start positioning themselves as matters move on. For those unwilling or unable to grasp either public funding or private funding, the future could be especially challenging.
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