Category: Policy & Business

In response to the flooding caused by Storm Henk earlier in the month, the Government activated both the Flood Recovery Framework and the Farming Recovery Fund.  Officials in the Department for Levelling Up, Housing and Communities have written to eight County Councils so far; Gloucestershire, Leicestershire, Lincolnshire, Nottinghamshire, Warwickshire, West Northamptonshire, Wiltshire and Worcestershire (others may be added).  This means in these areas;

• flooded households can apply for up to £500 to help with immediate costs
• affected households and businesses can claim for 100% Council Tax and Business Rate relief for at least 3 months
• up to £5,000 can be claimed to make homes and businesses more resilient to future flooding
• small and medium-sized businesses (including farmers) can apply for up to £2,500 from the Business Recovery Grant to help them return to business as normal.

For farming in particular, via the Farming Recovery Fund, those who have suffered uninsurable damage to their land can apply for grants of up to £25,000.

It appears the grants will be available through the individual County Councils who should advise on eligibility and how to apply.

Farmers in England and their agents can now notify RPA of changes to their land online.  The new digital service, called Rural Land Changes, will replace the electronic RLE1 form with the aim of significantly reducing the turnaround time for getting mapping requests completed.  Before completing an SFI or CS Mid Tier application it is important that mapping is correct and the current RLE1 process can hold up applications.  The aim of this new service is to allow more applicatons to be submitted sooner.  Requests via Rural Land Changes will be sent straight to the RPA’s Mapping Team to process, which should mean requests are actioned much quicker.

Rural Land Changes is already available in farmers’ Rural Payments accounts via the links for ‘Land’ and then ‘Request Rural Land Changes’.  The new online service has five options;

• Register New Land – up to 10 unregistered land parcels can be requested at a time.  Annotated maps will need to be uploaded
• Merge Land Parcels – up to 5 land parcels can be merged.  More than 5 will need to be actioned via ‘All Other Land Changes’ – see below
• Full Land Cover Change – where there is just one Land Cover in the parcel.  If there are more than one then the ‘All Other Land Changes’ (see below) will need to be used
• All Other Land Changes – for more complex changes which do not fall into the categories above, including;
  • Make permanent changes to parcels including size and shape
  • Add or remove permanent boundaries to split or merge parcels
  • Add or remove non-agricultural areas or features
  • Link a parcel to two SBIs
  • Merge more than 5 parcels
  • Change land cover where there is more than one land cover in a parcel
  • Make any other changes – except Transfer or Remove Land or to Update Land Use in a parcel; these continue to be done in the usual way via ‘Transfer Land’ and ‘Update Land Use’ on the system.
• See Previous Mapping Requests – this shows the history of changes for the last 5-years.

It is still currently possible to make mapping changes using an RLE1 form on paper or electronically, but during 2024, the facility to send an electronic RLE1 form by email will be removed and the new online option will replace it.  Paper RLE1 requests will continue to be accepted.  A reminder that handwritten RLE1 forms that are scanned and returned as email attachments have never been accepted.

To be able to use Rural Land Changes agents will need to have at least one of the following permissions for their clients on Rural Payments;

• Business Details – Make Legal Changes or Full Permissions
• Land Details – Amend
• CS Applications/CS Agreements – Amend or Submit
• ELM – Amend or Submit

According to RPA it is looking at other ways to ‘improve the mapping experience’ and there are plans to make ‘significant improvements’ over the next year.  We do already know that testing on the GeoPhoto app is due to start soon before being rolled out later this year.

 

Steve Barclay has announced a significant update to the agri-environment scheme offering in 2024.  This will see:

• The introduction of a combined Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) Mid Tier offering; designed to be easier to access with a single application portal
• An increase in the number of SFI/CS actions on offer, with 50 new ones announced
• On average a 10% increase in payment rates for SFI and CS agreements as from 1^st January 2024
• Paying a premium for ‘high ambition actions’ or for delivering packages of actions that deliver greater environmental benefits.

Combined SFI and CS

From summer 2024 there will be a single application service for SFI and CS Mid Tier options. It is unclear at this stage whether this will result in one ‘combined’ agreement, but the understanding is that there will be ‘distinct’ CS and SFI agreements at least for 2024.  There will be more than 180 options available, with duplication of actions under the two schemes removed wherever possible.  The SFI and new CS Mid Tier (and Higher Tier agreements) will be available through rolling application windows, starting in ‘summer’ 2024 with the first agreements commencing in autumn 2024.  In the meantime, SFI 2023 remains open for applications with an update to some of the payment rates (see table below).

CS Higher Tier agreements, which are more complex, will continue to operate under a separate application process.  However, Higher Tier actions will be made available under the other schemes so farmers will be able to pick from these options, without having a full bespoke Higher Tier agreement, if this is appropriate.

Existing Agreement Holders

Those already with an SFI 2023 agreement will either be able to add to their existing agreement at their annual review or enter into an additional separate agreement in 2024 when the scheme opens.  Existing CS Mid Tier agreement holders will be able to apply for a separate 2024 agreement.

Payment Rates

On average, payment rates for options under both SFI and CS have increased by 10%.  For those with a live SFI or CS agreement, payments will automatically be increased where applicable, as from 1^st January 2024 – agreement holders will not have to do anything.  Defra has said it will review all scheme actions and payments rates on a rolling basis.  The table below shows the old and new payment rates under SFI 2023.

New Actions

Under the new combined offer there will also be in the region of 50 new actions.  These will include support for precision farming and agroforestry for the first time.  There will also be an increase in funding for moorland and the introduction of more ‘maintenance’ options i.e for farmers who already have existing habitats.  A headline example of this is the increase in the payment for maintaining species rich grassland from £182 per hectare to £646 per hectare.  Under the new offering, more of the actions will be available under shorter 3 year agreements (as opposed to 5 years under current CS).  This should benefit tenant farmers.  The new options will fall under the following headings:

• agroforestry
• precision farming
• priority habitats and threatened native species
• enhancing and restoring waterbodies and water courses
• protecting lowland peat

The table below includes a sample of the new options.  As mentioned earlier, it is not yet clear whether there will be a clear dividing line between the SFI and CS in the future, or whether the schemes will merge.  It seems that, in 2024 at least, farmers will still be given separate SFI and CS agreements.  The new SFI actions for 2024 are taken to be those that  have a three-year requirement.  Those that require a 5 (or 10) year term are assumed to be CS options.

A full list of all the actions, both existing and new can be found in the Technical Annex at https://www.gov.uk/government/publications/agricultural-transition-plan-2021-to-2024/technical-annex-the-combined-environmental-land-management-offer.

Defra has said it ‘intends’ to confirm details and timescales around these new actions as part of the full scheme details ‘early in 2024’.

Premium Payments

There will be Premium Payments available for 21 high priority actions which Defra has identified as being required to achieve its environmental outcomes and for doing combinations of actions that deliver greater benefits when done together and at scale.  A list of these can be found via  https://www.gov.uk/government/publications/agricultural-transition-plan-2021-to-2024/agricultural-transition-plan-update-january-2024

SFI 2023 Progress

Defra has reported that 5,300 applications under SFI 2023 had been made as at 18th December.  Of these, 2,200 had been started.

The Government has announced it will not be introducing further legislation to change the nutrient neutrality rules.  This follows defeat of the previous legislation in the House of Lords (see https://abcbooks.co.uk/nutrient-nutrality-update/ ).  Instead, a series of measures aimed at boosting mitigation schemes, including the Local Nutrient Mitigation Fund will be used to unlock development.  The announcement was made in a letter to Local Authorities (see  https://www.gov.uk/government/publications/letter-from-minister-for-housing-planning-and-building-safety-on-nutrient-neutrality-december-2023/letter-from-minister-for-housing-planning-and-building-safety-on-nutrient-neutrality-december-2023#nutrient-neutrality-and-local-nutrient-mitigation-fund-update ).  This means that there will still be significant local opportunites for landowners to reduce the intensity of farming (and associated nitrogen and phosphate production) and receive payment for this.

Imports of carbon-intensive goods will be taxed from 2027 following a Government announcement.  Products such as iron, steel, aluminium, hydrogen, ceramics, glass and cement will be included, as will, importantly, nitrogen fertiliser.  Where such products are produced in the UK, they are subject to the Emissions Trading Scheme (ETS) which aims to put a cost on carbon.  This often means it is cheaper to import goods produced in countries without such a mechanism – this is known as carbon leakage.  The new proposal is to introduce a Carbon Border Adjustment Mechanism (CBAM).  This effectively applies a tariff to imports to equalise the effects of the ETS.  More details of the scheme can be found at – https://www.gov.uk/government/news/new-uk-levy-to-level-carbon-pricing.   It is not thought that the imposition of CBAM will alter pricing in the nitrogen market too much – but time will tell.  Most economists believe that carbon taxes, taking in the whole economy rather than jsut a few industries, are the most efficient way of reducing GHG emissions.

Income tax is to be increased in Scotland.  In setting the budget for 2024-25 Shona Robison, Deputy First Minister and Cabinet Secretary for Finance, outlined that a new ‘Advanced Rate’ will be introduced.  This takes the number of tax bands to six(!).  The Starter, Basic, Intermediate and Higher rates will remain the same at 19%, 20%, 21% and 42% respectively.  The new Advanced rate will be payable on taxable income between £62,430 and £112,430 at a rate of 45%.  An additional 1% has been added to the Top rate to bring it up to 48%.  These measures are estimated to bring in an additional £82m for 2024-25.

Farmers in Wales and Scotland looks set to bear the brunt of squeezed budgets in the develoved administrations.  In both countries, rural funding has been raided to pay for spending in other areas – notably health and social care.

Wales

The 2024-25 sees the budget for agriculture cut from £449m to £419m – a 7% drop in current prices at a time when inflation is high.  The Welsh Government has stated that funding for the BPS at £238m will be protected, as will money for the new Habitat Wales scheme.

Scotland

The Scottish farming sector has bencome used to its budget being raided.  £33m had already been deferred from the 2022-23 agricultural budget and the Scottish Government recently decided to take a further £28m from the 2023-24 budget.  These funds were the extra money allocated to Scotland as a result of the Bew Review (see https://abcbooks.co.uk/spending-review-2/ ).   There have been promises that the whole £61m will be returned in the future, but most commentators seem skeptical of this.  It is now proposed that the budget for 2024-25 will be reduced by £33m – from £739m to £706m.  Again, it has been promised that BPS and LFASS spending will be maintained (at current prices, not real terms).  This cut will affect the more ‘discretionary’ areas of spending – for example, a lower budget for AECS.

The Welsh Government has provided more details on its proposed Sustainable Farming Scheme (SFS) and opened a consultation on its plans.

Overall Structure

The three-tier structure for the SFS which has been long-proposed, is retained.  This comprises;

• Universal Actions – to be undertaken by everyone in the SFS
• Optional Actions – additional payments available for doing more than the Universal Actions
• Collaborative Actions – working with other land managers to deliver public goods at scale

Universal Actions

The Universal Actions under the SFS will be available from 2025.  The document sets out 17 Universal Actions (UA) which all farmers entering the scheme must abide by;

• UA1: Benchmarking – all farms will be required to complete an annual self-assessment focusing on some Key Performance Indicators (KPIs).  This information will have to be entered onto a Welsh Government online portal
• UA2: Continuous Professional Development – a minimum of six online CPD modules will need to be completed each year by Partners within the business
• UA3: Soil Health Planning – 20% of a farms soils must be tested each year plus nutrient accounts being completed annually
• UA4: Multispecies Cover Crop – on all land which would otherwise be left bare post-harvest for a period of more than 6 weeks
• UA5: Integrated Pest Management – all farms using Plant Protection products (PPP) must produce an IPM plan
• UA6: Managing Modified Peatland – certain farming practices are prohibited on modified peatland (i.e. peat which is not classed as a semi-natural habitat)
• UA7: Habitat Maintenance – all semi-natural habitats must be managed to benefit wildlife
• UA8: Create Temporary Habitat on Improved Land – features such as fallow margins, headlands, grass strips, herbal leys, cover crops etc. must be established where the farm does not have 10% of its area in Habitat land (see scheme rules below)
• UA9: Designated Site Management Plans – for SSSIs
• UA10: Ponds and Scrapes – farms need to manage or create water features (at least two ponds totalling 0.1Ha on farms under 80Ha; minimum of two ponds totalling 0.2Ha on farms over 80Ha)
• UA11: Hedgerow Management – all hedges to be thick and dense stockproof barriers.  1m buffer strip for sprays and fertiliser from base of hedge
• UA12: Woodland Maintenance – maintain existing woodlands to optimise benefts for livestock, wildlife, and business diversifcation
• UA13: Woodland Creation – tree planting including shelter belts, agroforestry and orchards.  Required if the farm does not have 10% of its area in woodland in line with the scheme rules (see below)
• UA14: Historic Environment – maintain and enhance any historic features on the land
• UA15: Animal Health Improvement Cycle – working with a vet to improve livestock health
• UA16: Animal Welfare – complete competency training and carry out lameness and body condition scoring to improve livestock welfare standards
• UA17: Biosecurity – establish protocols to prevent disease entering or leaving the farm

Slightly confusingly, the document also sets out two Scheme Rules and a Universal Code alongside the Actions.  The Scheme Rules require that 10% of the farm must be in ‘habitat’ for the benefit of wildlife.  In addition, 10% must also be under tree cover.  Under the Scheme Rules;

• habitat land covers any semi-natural habitats plus ponds, hedgerows etc.
• where there is woodland, the ground layer of the wood can count towards the habitat percentage whilst the trees contribute to the tree cover requirement
• if there is not enough existing habitat, new temporary habitats can be created under UA8
• woodland, scattered groups and individual trees will count towards the 10% tree cover requirement.  Orchards and agro-forestry will also be eligible
• The minimum tree cover requirement must be met by the end of 2029
• in calculating the requirement, it is acknowledged that some areas are ‘unplantable’ – these include land under tenancies where the agreement excludes tree planting; permanent features such as tracks, yards & ponds; and high-quality habitats such as peatland.  These areas will be removed from the calculation

The Univeral Code for Habitats applies to any land where the vegetation comprises less than 25% of sown agricultural species.  There is a list of managment practices which are prohibited.

There will also be a requirement for all farms joining the scheme to undertake a carbon assessment.

Payments

The SFS will operate on a calendar year basis.  There will be an annual declaration of land (probably by 15th May).  Advance payments for the Universal Actions are envisaged in October, with a balance in December.

There will be four categories of payment, depending on land use;

• land in existing woodland being maintained
• woodland creation
• habitat (either maintaned or created)
• all other land (i.e. farmed area)

There may be capping of payments (as under the BPS) for large recipients of support.

No details on actual payment rates have been released as the Welsh Government is waiting to find out the budget settlement for 2025 onwards.  The methodology of calculating payments will effectively be ‘income foregone’.   

Phasing and the BPS

Farmers will be able to choose to continue with the BPS, or move onto the SFS.  Once they have opted for the SFS they cannot go back to the BPS.  BPS payments, including Redistributive and Young Farmer Payment will be phased down over the Transtion Period 2025 to 2029 as set out in the table below;

BPS capping will also be adjusted to fit in with tapering down of payments.

For those that choose to go into the SFS, there will be a safety-net during the Transition so that their SFS payment is at least the same amount as their BPS would have been.  Measures will be put in place to prevent the BPS claimant population and individual BPS claims increasing in size during the Transition.  This will mean, from 2025;

• farmers who choose to participate in SFS will surrender their entitlements
• the National Reserve will be closed; new entrants will be directed to the SFS
• the transfer of BPS entitlements will be restricted to those who transfer and / or lease entitlements with the land and farmers currently leasing in entitlements for land they currently claim under BPS
• the two-year entitlement usage rule will be removed.

Optional & Collaborative Actions

These will not be available in 2025, the document indicates they will be introduced later, but does not specify a precise date.  In the meantime, a number of existing schemes will continue.  These include;

• Small Grants – Yard Coverings
• Small Grant – Environment scheme
• a range of Woodland schemes to create new and manage existing agro-forestry and woodland areas
• Integrated Natural Resources Scheme and the National Peatland Action Programme
• the Sustainable Innovation Scheme – helping to join up supply chains
• Nutrient Management Investment – helping to ensure water is protected from pollution
• Animal Health and Improvement Cycle – a Pilot will help improve on-farm animal health and welfare measures

This is to be the final consultation before the scheme is launched.  If most Government consultations are anything to go by, there is likely to be little difference between the proposals set out here and what is finally enacted. 

Details can be found at – https://www.gov.wales/sustainable-farming-scheme-consultation .  Responses to the Consultation need to be made by the 7th March.

Readers may be aware of the ’30 by 30′ commitment – the pledge by Government that 30% of the nation’s land will be ‘protected’ for biodiversity by 2030.  Each part of the UK has signed-up to this international commitment.  They key question has been what counts towards the 30%.  In England, Defra has answered this question with a recent publication – see https://www.gov.uk/government/publications/delivering-30by30-on-land-in-england.

Perhaps surprisingly, existing Protected Landscapes, i.e. National Parks and National Landscapes (previously AONBs), will not automatically count towards the target – this is because biodiversity is not specifically protected under these designations.  Under the current criteria just 8.5% of England is currently counted.  This is mainly SSSIs, Nature Reserves and the Public Forest Estate.  Defra has mapped-out a further 26.8% of England that may be potential ’30by30′ areas, including the Protected Landscapes, plus Nature Recovery projects.  Other areas such as Landscape Recovery and BNG sites could also add area (but haven’t been mapped).  However, it appears that Protected Landscapes will be expected to contribute significantly towards the target.  This will require some additional biodiversity management to be undertaken.  The document stresses that this should be voluntary, but landowners in these areas will be worried that extra restrictions may be placed on land use in order that this target can be met.  

 

 

Natural Resources Wales (NRW) has confirmed the second stage of the Enhanced Nutrient Management approach has been laid before the Senedd.  This only relates to the total nitrogen limit from livestock manures for the whole holding; all other measures under the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 remain in place or are subject to the relevant trasition period.  The Enhanced Nutrient Management approach will be implemented from 1st January 2024 and run until 31st December 2024 and will mean farms with 80% or more grassland will be able to apply up to 250kg per hectare of nitrogen from livestock manures during 2024.  Under the new regulations (the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2023), where producers expect to exceed the 170kg per hectare limit in 2024, they must email NRW by 31st March 2024 with an accompanying enhanced nutrient management plan for the holding.

The first stage, which moved the implementation date (again) of 170kg per hectare holding limit of nitrogen from livestock manure from 31st October 2023 to 1st January 2024, was completed back in October.