Category: Policy & Business

The Scottish Government has provided more details of the ‘conditionality’ that will apply to farm payments in 2025.  This is included in an update to its Agricultural Reform Route Map (see https://www.ruralpayments.org/topics/agricultural-reform-programme/arp-route-map/ for details).

There are three main elements for 2025;

• New Cross-compliance Rules:  new measures are to be introduced to protect peatland and wetland.  These will be included under GAEC6 – Maintenance of Soil Organic Matter (there was originally plans to have them as a new stand-alone GAEC8).  It will apply to peat soils of over 50cm depth and with a ‘near natural vegetative cover’ – i.e. unimproved land.  There will be prohibitions on fertiliser, pesticides, herbicides, cultivations and any drainage works
• Calving Index:  for those claiming the Scottish Suckled Beef Support Scheme (SSBSS) headage payment, there will be a new condition on calving index.  Payment will only be made on calves coming from cows with an interval of 410 days or less.  This will be on a cow-by-cow basis, and not on a herd-average.  First-calvers will be exempt from the rules.  The Scottish Government outlines that the calving interval threshold may reduce in future years, but it will not reduce by more than 10 days in any given year.
• Whole Farm Plan:  the requirements for this are gradually being phased-in.  For 2025, farmers will need to indicate on their Single Application Form that they have done at least two of the following five activities.
  • Carbon Audit – done within the previous five years prior to May 2025
  • Biodiversity Audit – done within the previous five years prior to May 2025
  • Soil Analysis – done within the previous five years prior to May 2025 
  • Animal Health and Welfare Plan – to be updated annually
  • Integrated Pest Management Plan – to be updated annually

The Scottish Government points out that there is currently funding for Carbon Audits and Soil analysis through the Preparing for Sustainable Farming programme.

Detailed guidance on the conditionality rules for 2025 and more information about the actions farmers and crofters will need to take in 2026, will be announced in summer 2024.

Red Tractor has officially announced that it will drop its proposed ‘Greener Farms’ environmental bolt-on to its Farm Assurance standards.  This comes after widespread producer concern over additional compliance costs and the way the new standards were developed and announced.  Meanwhile, an independent review has been jointly commissioned by the NFU and AHDB along with NFU Cymru, the Ulster Farmers’ Union and NFU Scotland.  This will be a wholesale review of ‘Farm to Fork’ assurance and aims to ensure that UK schemes and practices are fit for purpose.  More details can be found at – https://www.nfuonline.com/updates-and-information/industry-wide-assurance-review-officially-launched/ .

UK Minimum Wages rise as from the 1st April.  The main National Living Wage rises to £11.44 per hour from £10.42 – an increase of 9.8%.  The Living Wage also now applies to anyone 21 years old or over – previously it was only for those 25+.  All this adds considerably to costs for those farming and horticultural businesses employing a lot of staff.  England no longer has an Agricultural Wages Board, but they continue to operate in Wales and Scotland.  These also change their rates from the 1st April.  Rates are set to be compliant with Minimum Wage rates, but there are also supplements based on experience etc.  The Welsh Wages Order for 2024 can be found at – https://gov.wales/agricultural-wages and the equivalent for Scotland at – https://www.gov.scot/publications/agricultural-wages-scotland-twenty-eighth-edition-guide-workers-employers/.

There has been a re-shuffle of the Welsh Cabinet following the appointment of Vaughan Gething as First Minister.  This has seen Lesley Griffiths be replaced by Huw Irranca-Davies as Rural Affairs Minister, which covers the farming brief.  In fact, Mr Irranca-Davies’ portfolio has expanded, as he is Minister for Climate Change and Rural Affairs.

England

It seems increasingly clear that farmers (and their advisors) will not have to do anything to claim their de-linked BPS payments this year.  Defra and the RPA have been silent on what might be required.  In the absence of information, there was speculation that claimants might, at the least, have to tick-a-box to indicate they still existed.  There was a school of thought that Defra would not want to give up on the information provided by the annual BPS application, and that some sort of field-by-field submission would still be required.  However, whilst there has been no formal announcment from Defra, ‘stakeholders’ are clearly stating that those due delinked payments will not have to do anything.  The money will simply be paid into bank accounts.  It will come in two tranches – half in August and half in December.  Those budgeting should remember that there will be further progressive reductions this year as the BPS phase-out continues.  See Key Farm Facts for details.

Farmers in England should remember that the deadline for transfering delinked Reference Amounts is the 10th May.  See our article of last month for more details.

One final point is on Countryside Stewardship and Environmental Stewardship revenue claims.  The deadline for these is the 15th May.  These were often done as part of the the overall ‘BPS process’.  With a BPS form to trigger the work, they may get overlooked.

Scotland, Wales & N.I.

Of course, the BPS carries on unchanged in the rest of the UK for the 2024 year.  None of the devloved regions is instituting radical change to their BPS systems for 2024 as all have plans to reform farm support sooner or later.  Therefore, for most, the rules and forms remain unchanged from 2023.  The deadline for the submission of forms is the usual 15th May.  In Wales the entitlement trading deadline is also the 15th May.  In Scotland it is 2nd April.

Defra has provided an update on the development of private nature markets.  This sees companies, organisations and individuals paying for improvements to nature, rather than relying on Government funding.  Defra has an ambition to see £500 million per year coming from these sources by 2027 and rising to £1 billion by 2030.  The paper points to some progress being made – notably the introduction of mandatory Biodiversity Net Gain and the development of Nutrient Neutrality markets.  However, away from these markets created by regulation, we see little evidence of much money being generated for nature from the private sector.  The target of £1bn seems some way away.  The report can be seen at – https://www.gov.uk/government/publications/nature-markets-framework-progress-update-march-2024/nature-markets-framework-progress-update-march-2024#palladium

Defra has announced it will be applying a limit to the area SFI applicants can put into six specific SFI options that are currently available.  Under the announcement made today (25th March), SFI applicants will only be able to put 25% of their land into the following actions that take land out of direct food production;

• Flower-rich grass margins – IPM2
• Pollen and nectar flower mix – AHL1
• Winter bird food on arable and horticultural land – AHL2
• Grassy field corners and blocks – AHL3
• Improved grassland field corners or blocks out of management – IGL1
• Winter bird food on improved grassland – IGL2

The cap will come into effect from midnight tonight (25th March).  After this date Defra will not accept applications where the amount of land in total that is entered into any combination of the above actions is above 25% of a farm’s total land.  Furthermore, Defra has said ‘we want to emphasise that we would expect no more than 25% of a land parcel to be entered into IGL1, AHL3 and IPM2′.  It doesn’t particularly say whether applications wouldn’t be accepted if this was the case.

The new rules do not apply to;

• existing SFI agreements
• any SFI application that is already in progress
• SFI agreements that have already been offered to applicants 

In recent weeks there has been coverage in the media of farmers putting large areas, or even whole farms into these actions.  Defra has been saying that there has only been limited evidence to date of this, but it now acknowledges that some of these actions are ‘being used more than intended in a small number of cases’.  It says the changes ‘will ensure the scheme continues to support farmers to produce food sustainably alongside improving the environment’.

The Farming Equipment and Technology Fund (FETF) is now open for applications for the Animal Health and Welfare grants.  Our article last month (see https://abcbooks.co.uk/grants-for-equipment-technology/) gave details of the grant.  In summary, this provides funding towards items of equipment and technology that have been pre-identified by Defra to help improve animal health and welfare on farms.  There are over 130 items on the list and 29 are new additions.  The minimum grant is £1,000 and the maximum is £25,000 and, under the Animal Health and Welfare grant, applicants can receive 50% towards the lower of either the cost set out on the list or the actual cost paid for the item.

Applications are scored (each item has a score), so it is possible not everyone will receive a grant, but applicants can increase their score by 20% if they provide evidence that they have discussed the application with a vet.

The application window runs until 1st May 2024.  The full guidance can be found at https://www.gov.uk/government/publications/farming-equipment-and-technology-fund-2024.  Applications are made using the new Farming Investment Fund (FIF) application service – this is separate to the Rural Payments service and requires a complete new registration.  A reminder that the application window for the Productivity and Slurry Management grants via the FETF opened earlier in the month (see https://abcbooks.co.uk/productivity-and-slurry-grants-open/) and runs until midday on 17th April 2024.

The Land Reform (Scotland) Bill was laid before Parliament on 14th March 2024.  The proposals include measures which will apply to large rural landholdings of over 1,000 hectares, prohibiting sales in certain circumstances until Ministers have considered the impact this will have on the local community.  This could result in large holdings being split into smaller lots to help local communities be able to buy them.  In addition, the Bill will introduce advance notices for the sale of some large landholdings; again this would be to give local communities more opportunity to raise funds so thay can own their own land.  The Bill will also place legal responsibilities on these largest landowners to show how they use their land and ‘how that use contributes to key public policies’ – i.e. climate change and protecting and restoring habitats.  They will also have to engage with local communities about how they use the land.

In other proposals, Scottish Ministers would have a duty to publish a model Land Management Tenancy – Environmental Tenancy to cover;

• regenerative and sustainable agriculture
• uses contributing to achieving net zero
• climate change
• sustaining or increasing biodiversity.

There are also proposals to revise Tenancy legislation in the following areas;

• compensation for improvments, including improvments which enhance sustainable or regenerative agricultural production
• extending Tenant’s diversification to cover environmental benefits
• compensation for game damage
• rent reviews – including the productive capacity of the holding, rent payable on similar holdings, economic conditions of relevant agricultural sectors, open market rent for Landlord’s fixed equipment not used for agriculture, and open market rent for land not used for agriculture
• the rules for good estate management and rules of good husbandry to include references to sustainable and regenerative practices

The full Bill can be found at https://www.gov.scot/news/land-reform-bill/.