Category: Policy & Business

The Rural Payments Agency (RPA) has confirmed as of 4th December 97% of BPS 2023 claimants had received their payments.  As readers will be aware for most this will have been a balance payment, worth about 50% of the claim, with the advanced payment having already been received earlier in August.  Payment statements will also be sent out during December and should be checked carefully.  This is the last payment under the ‘old’ system, as from 2024 payments will be delinked, (see our latest article on delinked payments https://abcbooks.co.uk/delinked-payments/) although Defra has said it will continue with the system of making advanced and balance payments in August and December for the remainder of the Agricultural Transition – until 2028.

In terms of actual payments, the gross rates remain the same as in 2022 (and 2021), but the effect of the Agricultural Transition will see farmers continue to receive less each year.

The table below summarises this year’s rates plus those for the past two years.  It gives the gross amounts for 2022 and 2023 and also net amounts, which allow for the lowest Agricultural Transition ‘band’ (20% reduction in 2022 and 35% in 2023).  Larger payments will see higher reductions.  The % reductions have been increased again this year and are for the amount received:

• Up to £30,000 – 35%
• £30,000 to £50,000 – 40%
• £50,000 to £150,000 – 50%
• Over £150,000 – 55%

Defra has published guidance for the Improving Farm Productivity Grant.  This can be found at https://www.gov.uk/government/publications/improving-farm-productivity-grant-round-2-applicant-guidance.  The second round is due to open in January (see our article earlier this month https://abcbooks.co.uk/farm-grants-2/) and will also include grants for the installation of solar equipment for the first time.  Other key features of Round 2 include:

• grants for both robotic and automated innovative equipment to aid crop and livestock production
• the minimum grant for equipment under these headings has been reduced to £25,000; the maximum remains at £500,000.  The grant will continue to cover up to 40% of the cost of the eligible items
• for the installation of solar equipment the minimum grant will be £15,000 with a maximum of £100,000.  The grant will cover up to 25% of the cost of eligible items
• it is possible to apply for both automated & robotic equipment and solar equipment but the total maximum grant cannot exceed £500,000
• Round 1 included grants for slurry acidification equipment.  This is not available under Round 2. (slurry equipment is now fund under the Slurry Infrastructure Grant).

The Online Checker is expected to open in January and be available until March.

Defra has announced that the SFI applications portal will close between 27th December 2023 and 1st January 2024.  This is to allow for annual updates to be undertaken.  For any unsubmitted SFI applications, it also means the information completed so far will be lost and a new application will need to be restarted when the system, re-opens in January.  Those who are unable to submit an application because they are waiting for help/advice from the RPA will be contacted by the Agency to try and reconcile these in time.  Everyone else is being encouraged to submit their application before the end of the year.  All unsubmitted applications will be withdrawn from the system after midnight on 31st December 2023 so that the updates can take place.  In addition, farmers or their agents will not be able to start a new SFI application after midnight on 26th December 2023.  All applications started, must be submitted by 31st December otherwise all the work done so far will be lost.  The portal will then re-open on 2nd January 2024 to start new applications.

There is no information on what the annual update includes; we are expecting an announcement on the SFI (and CS) including new options available in 2024, but there is no indication that these updates are to do with this.  We will endeavour to keep readers informed of any new announcements.

Cross Compliance rules end at midnight on 31st December 2023 in England. However, as most rules are already part of domestic law, this will have limited practical impact on farmers and land managers.  Farmers will have to continue to comply with existing legal requirements in the areas of environment, animal & plant health, animal welfare and public health.  These rules are set out in the Rules for Farmers and Land Managers which can be found at https://www.gov.uk/guidance/rules-for-farmers-and-land-managers.  Defra has said compliance will be monitored by the existing Statutory Bodies and ‘regulated in a fair, proportionate and consistent way’.

The end of cross-compliance only applies in England due to the de-linking of payments.  It continues in all other parts of the UK.

However there are a small number of cross-compliance rules which are not covered in English law.  These are:

• certain rules regarding hedgerows and other field boundaries
• watercourse buffer strips
• soils

Hedgerows and Other Field Boundaries

With regards to hedgerows, legislation already covers such things as disturbing birds nests and not removing hedgerows without consent from the Local Planning Authority.  Not included are some management practices which will be familiar to farmers:

• 2m buffer strips from the centre of hedge
• not cutting during bird-rearing season.

However, readers will recall Defra is currently consulting on these (see our article in July https://abcbooks.co.uk/hedgerow-protection/ ) and a response together with future guidance is expected shortly.  With regards to other field boundaries, such as stone walls, earth and stone banks, these could be protected via Conservation Areas or if they have been created or maintained through a Stewardship option these will have to remain in place and will be subject to the terms of the Agreement.

Watercourse Buffer Strips

In terms of Grass Buffer Strips, once cross-compliance ends, there will no longer be a requirement to maintain a green cover on land either;

• within 2 metres of the centre of a watercourse
• from 1 metre on the landward side of the bank

However, use of grass buffer strips continues to be one of the actions farmers can take to prevent water pollution and meet the Farming Rules for Water.  The Farming Rules for Water see (https://www.gov.uk/government/publications/applying-the-farming-rules-for-water/applying-the-farming-rules-for-water) prevent the use of manure and fertiliser close to a watercourse.  Farmers must take all reasonable precautions to prevent pollution from land management and cultivation practices, such as spraying pesticides.

Soils

Under the Farming Rules for Water farmers continue to be required to take reasonable precautions to prevent manure, fertiliser and soil getting into watercourses – known as diffuse water pollution.   More advice on how to prevent this can be found at https://www.gov.uk/guidance/rules-for-farmers-and-land-managers-to-prevent-water-pollution#prevent-erosion-manage-livestock-and-soil.

A series of announcements on ‘Protected Landscapes’ in England were made ahead of the COP28 Climate Summit in the UAE.  This was then followed by further policy initiatives outlined at the CLA’s conference, held at the end of November.  Below is a summary;

New National Park

The Environment Secretary has commissioned Natural England to begin identifying an area which will be considered for designation as the next National Park in England.  The search for a new National Park, which was a manifesto commitment, will begin in the New Year and will focus on looking for England’s most beautiful nature spots, alongside the area’s ability to connect people with nature.  One of the recommendations in the Glover Review in 2019 was that three of the larger AONBs (National Landscapes – see below) should be considered for National Park status.  In particular the Chilterns, the Cotswolds and Dorset & East Devon were suggested.  A final decision will be made by the Secretary of State.

ANOB Re-brand

All Areas of Outstanding Natural Beauty (AONBs) in England and Wales will now be known as ‘National Landscapes’.  The re-brand follows a recent survey which showed that public awareness of the protected landscapes was less than 50%.  The decision was made to carry out a full re-brand starting with simplifying the name to National Landscapes, along with a new visual identity with the aim of improving the visibility and accessibility of these important natural areas.

Landscape Recovery

A further 34 projects have been successful in the second Round of the Landscape Recovery (the third element of ELM).  This is 12 more than in the first Round.  Between them they will receive £25m of funding, which will;

• restore more than 35,000 hectares of peatland
• sustainably manage more than 20,000 hectares of woodland
• create over 7,000 hectares of woodland, including some temperate rainforest
• benefit more than 160 sites, which include Sites of Special Scientific Interest (SSSIs).   

Together, the projects are said to involve over 700 farmers and landowners covering over 200,000 hectares across England.  The next step will be to move into the Project Development Phase (PDP), in which there will be up to two years to complete project development activities.  After which, subject to reaching agreement on suitable funding, projects will then move into Implementation.  It has been noticed that in both rounds of Landscape Recovery Defra has given out more agreements than it indicated at the outset.  This might be because of the high quality of the applications.  However, it might also be because Defra envisage a number of them not continuing for the long-term.  They are meant to draw in private funding eventually which some might not achieve.  Could Defra be building in an element of contigency by accpeting a few more?   Defra has confirmed a third round of Landscape Recovery will be open in 2024.

Natural Environment Readiness Fund (NEIRF)

The new Environment Secretary, Steve Barclay has announced the third round of the Natural Environment Investment Readiness Fund (NEIRF) at the CLA’s conference.  NEIRF will open on 11th December 2023 and close on 16th February 2024, offering grants to help farmers attract private investment in nature projects, such as selling carbon units through peatland restoration.  With individual grants of up to £100,000 on offer from a total £5 million, this round has been designed specifically to support farmers to prepare nature projects that will help attract investment from the private sector.  The NEIRF grants can be used to help farmers blend public and private investment.   The Government has a target to stimulate at least £500 million of private sector investment into nature recovery in England each year by 2027, rising to at least £1 billion each year by 2030.  So far, amounts being commited appear well short of this.   Further information on NEIRF can be found at https://www.gov.uk/government/publications/apply-for-a-grant-from-the-natural-environment-investment-readiness-fund.

Woodland

There has also been a number of measures announced to boost tree planting, including;

• £750,000 of Research & Development funding to improve resilience, management and protection of unique temperate rainforests in England which can be found in Cornwall, Devon and Cumbria.
• A competition to create a new National Forest.  This is inspired by the success of the existing National Forest, which spans 200 square miles across parts of Derbyshire, Leicestershire and Staffordshire.
• The creation of two more Community Forests in Derbyshire and the Tees Valley which will create 175 hectares of new woodland planted by 2025 alongside new pipeline forests.

Defra has announced a new round of funding & grants opening in the next few weeks.  These were made by Steve Barclay in his first major speech as the new Environment Secretary, which was delivered at the Country Land and Business Association Conference.  A summary of these is included below.

Farming Transformation Fund (FTF)

The FTF provides grants towards large capital items to help businesses improve productivity, profitability, animal health & welfare, and environmental sustainability.  The FTF is part of the Farming Investment Fund (FIF).  The grant funds projects in different themes, the recent annoucement gives an update on the following themes:

• Improving Farming Productivity – a second Round of this theme will be open for applications in January.  Defra is making a total of £30m available, to provide capital grants of between £25,000 and £500,000 towards robotic and automatic equipment.  This Round will also include grants of between £15,000 and £100,000 towards solar-equipment.  It is believed this will be at a rate of 25%, (similar to that in the Calf Housing Grant) as opposed to the usual 40%.  Funding will support roof-top solar and also solar equipment that can float on irrigation resevoirs.  Further guidance is expected to be published sometime in December in preparation for applications to open early in the New Year.  We were not sure if Barn-top Solar would be a separate scheme when we first wrote about it (see https://abcbooks.co.uk/capital-grants-upcoming-schemes/), but it seems it is being brought under the FTF unbrella as part of the Improving Farming Productivity theme.
• Slurry Infrastructure Grant –  a reminder the Online Checker is open until 17th January.  See previous articles for details https://abcbooks.co.uk/slurry-infrastructure-grant-3/.
• Calf Housing for Health and Welfare – the Online Checker is now closed

Farming Innovation Programme

A further £8.65m is to be made available through Defra’s Farming Innovation Programme.  This is run in partnership with Innovate UK, part of UK Research and Innovation (UKRI).  The scheme funds innovation, research, and development projects that benefit farmers, growers and foresters;

• Research Starter Project – Round 4 opens on 18th December for Expressions of Interest and runs until 14th February 2024.  Under this Round, a total of £850,000 is available for individuals or group of farmers, growers or foresters who have an idea that could improve farming and solve a long-term practical challenge.  The process is competitive, grants for project costs of between £28,000 and £56,000 can be applied for.  Funding will cover up to 70% of the costs.  More information can be found at https://farminginnovation.ukri.org/explore/.
• Large R & D Partnership – Round 3 opens on 15th January and closes in March 2024 (exact date yet to be confirmed).  This funding is for those who have a farming product or service that needs support to be developed.  The large R & D Partnership funds project costs of between £3-5m for up to 4 years.  The grant is competitive.  More information can be found at https://farminginnovation.ukri.org/develop/.

Defra has also announced that 2024 will see the extension of Farming Innovation Programme grants to include Accelerating Development of Practices and Technologies (ADOPT) fund.  Through this, businesses will be able to apply for a share of £44 million to test and trial new technology and techniques on farms.

It seems highly likely that there will be a General Election next year.  Political commentators are split between the Prime Minister, Rishi Sunak, going for an early date at the time of the Local Elections in May, or waiting until the autumn (maybe in the hope that ‘something turns up’).  Although, theorectically the election could be delayed into January 2025 the received wisdom is to avoid winter elections as it depresses turnout.

Given the imminence of the vote and the large poll lead the party has, more interest has turned to potential Labour policies if they were in Government.  Very few concrete plans have been set out.  At the Party Conference in the autumn little was said abour farming or rural matters more generally.

A few additional pointers have come from a speech by Labour’s shadow Defra secretary, Steve Reed, at the recent CLA conference.  It seems unlikely that the budget for farming will see a big boost from any incoming Labour administration.  Mr Reed stated that the economy would have to grow before funding could be increased.  However, he also set out that he was not planning substantial changes to the ELM scheme either.  This provides some policy certainty at least.

The Government has started publishing the detailed regulations for Biodiversity Net Gain (BNG).  This requirement for most development in England to result in an increase in wildlife habitats becomes law from 1st February 2024.  Six Statutory Instruments have been published that, together, provide the legal basis for the system.  These can be found at https://defralanduse.blog.gov.uk/2023/11/29/the-biodiversity-net-gain-statutory-instruments-explained/ along with an explanation for each.  Guidance on BNG has also been updated at the same time,  This can be found at – https://www.gov.uk/government/collections/biodiversity-net-gain .

As the SFI 2023 has been open for a couple months now we thought it might be useful to share some things we have learnt so far:

• Ensure maps are correct on Rural Payments – before you begin an application it is important that the business’s digital maps are correct.  At the bare minimum, ensure the parcels that will be included in the application are up todate, but it is probably a good time to check that all land parcels are correct.  For any parcels that need updating for mergers, splitting, boundary changes, ineligible features, land cover changes, new land etc., an RLE1 will need to be submitted.  Further information can be found at https://www.gov.uk/government/publications/tell-the-rural-payments-agency-about-land-changes-and-entitlement-transfers/rle1-guidance-2023.  This can be  submitted online, but applicants will have to wait until the RPA has updated the changes before they continue with their SFI application.  It is possible to add an already registered parcel via the RPA’s ‘add land by email service’ see https://www.gov.uk/guidance/rural-payments-applications-add-a-land-parcel-by-email
• Ensure Land Cover is correct on Rural Payments – before you begin an application, for each land parcel you want to use for an SFI action, check that the land cover shown on your digital maps is compatible with the land use code declared in the BPS 2023 application (again it may be prudent to check all land parcels).  When you view each land parcel on your digital maps in the Rural Payments service, you’ll see that it has one or more registered land covers.  The land cover identifies what broad category the land is.  There are three agricultural land covers;
  • arable land
  • permanent grassland
  • permanent crops

There are also a number of non-agricultural land covers, such as woodland or farm buildings, the land use codes must be compatible with these – i.e. if the land cover is permanent grassland the land use cannot be an arable code or temporary grassland.

• Ensure there are no undeclared or overdeclared parcels – for each land parcel you want to use for an SFI action, in ‘Land Use’ on Rural Payments ensure there are no undeclared or over-declared parcels.  These may be due to splitting fields at BPS time last year – the RPA has now used the submitted RLE1, measured the parcels and the areas are different to those estimated on the BPS application.  This can leave an undeclared area.

All of the above actions will cause an ‘error warning’ if not completed.  We have also noticed there have been problems when trying to submit an SFI agreement when there is another application waiting to be processed i.e. if a CS capital grant is in the process, the system doesn’t seem to cope.  We would hope this will be sorted by RPA shortly, but it is something to be aware of if you have an ‘error’ message when you come to validate your application on completion – if you cannot find any other errors it could be because you have another application waiting to be offered.

Once an application has been submitted, we have found, at the moment, the turnaround time by RPA is quick; about 10 days and the agreement, if accepted, will start on the first day of the month following.

As with all new schemes there will be a lot of questions at the start, until everyone gets more familiar with the rules.  Furthermore unlike most of the previous schemes, the rules are less ‘rigid’.  For most of the actions the handbook simply says ‘It’s up to you how you complete this action, as long as you do it in a way that can reasonably be expected to achieve this action’s aim’.  Further help is available in the ‘How to do’ guidance for each action.  These are voluntary and can be found via https://www.gov.uk/government/collections/sustainable-farming-incentive-guidance

The RPA has answered some of the most commonly asked questions and this Q and A can be found at https://ruralpayments.blog.gov.uk/2023/11/17/the-sustainable-farming-incentive-commonly-asked-questions-answered/

One of the most common questions we receive is are you able to subsequently add land to an agreement?  The answer to this is ‘yes’ and it can be done via two ways:

• It will be possible to upgrade your SFI agreement to add more SFI actions and land.  This will be done via an ‘upgrade request’ towards the end of the first and second years of your 3-year SFI agreement.  There will be strict deadlines on submitting an upgrade request and, if approved, on accepting it.  With an upgrade the length of the agreement will not extend.
• It is possible to have more than one agreement.  Applicants can submit as many applications as they want and subsequently have a number of agreements running in conjunction.  These agreements could cover separate land parcels or,it is possible to add a compatible action to a land parcel in an existing agreement.  Although you cannot apply for NUM1 or IPM1 in multiple agreements.

By mid-November, Rural Payments reported there were 1,000 live agreements with a further 300 offers with customers; perhaps a little lower than they anticipated, but it feels like there is a lot of interest in the scheme now and momentum is growing.  Similar to when the system was new under the BPS, there are likely to be some ‘teething’ problems and it will also take time for clients and advisors to get to grips with the new system.  However, for many, it is possible to build a good agreement which complements the existing farming operations and can help to offset some of the ‘lost’ BPS payments.