Category: Policy & Business

The RPA has emailed all BPS claimants informing them that it will be sending out Delinked Payment Information Statements soon.  The Statements will be sent out in batches from early November; if claimaints have not received one by early December, they should contact the RPA.  The information in the Statement should be checked and any queries need to be raised with the RPA by 29th February 2024.

Delinked payments will replace BPS payments from 2024 – the 2023 claim was the last under the old Basic Payment Scheme.  The RPA will pay Delinked payments each year from 2024 to 2027.  The amount received will decrease each year as the progressive reductions apply under the Agricultural Transition.  Those in receipt of Delinked payments will not need any land or entitlements to receive the payments.

The Statements will show the ‘Reference Data’, this is based on BPS payments received in the ‘Reference Period’ – 2020, 2021 and 2022 BPS years.  The Reference Data determines the ‘Reference Amount’, basically the average yearly payment received over the three years.  This will be then be paid in each of the years from 2024 to 2027 to those that are eligible, minus the progressive reductions for that year.  Our Key Farm Facts contains details of the yearly reductions, although Defra has still not confirmed the percentages for 2025 – 2027.  To be eligible for a payment, the business must have made an eligible claim in 2023 and have a Reference Amount.  Those who received a payment under the Lump Sum Exit Scheme are not eligible. 

It will not be necessary to apply to receive Delinked payments – they will come automatically as long as the business is eligible.  The value of the  payments for 2024 to 2027 will not be affected if the farm size changes, or if there is a change in what the land is used for after BPS 2022.  Payments will be paid half from 1st August and the balance from 1st December from 2024 onwards.  Where a business receives Delinked payments, these will be taxed as income.

From 15th February to 10th May 2024, it may be possible to transfer some or all of a business’s Reference Data to another business.  This may be because there has been a change in business structure (mergers, scissions), land has changed hands, or the business may just wish to sell their ‘entitlement to the future support’.  The business receiving the Reference Data and hence the Delinked payment must have made an eligible 2023 BPS (except for some inherited land cases).  Those who have Reference Data (i.e made a claim in 2020-2022) but did not make a claim in 2023 would not be eligible to receive a Delinked payment but can still transfer their allocation to an eligible business.  More information on how to do this is expected later this year.  But RPA has made it clear that it is up to businesses if they want to transfer any of their Reference Data and it will not get involved in disputes between claimants. 

In some cases, it may only be possible to transfer the Reference Data if eligible land in England was transferred from the business transferring out the Reference Data to the business receiving the Reference Data.  The transfer of land must have happened after 15th May 2020 and before 16th May 2023.  A transfer of land is needed where the business:

• has a Reference Amount of more than £30,000 and the transfer is for only part of the Reference Data or is to more than one business – this rule is to stop Reference Data being artificially split between businesses to reduce the progressive reductions that apply
• wants to transfer out Reference Data that has been transferred to it from another business
• wants to transfer Reference Data from a business where the SBI has been closed – the SBI will be shown as ‘locked’ on the Rural Payments service and RPA will have written to the business to tell them it has closed the SBI

Further information on Delinked payment, including worked examples, can be found at https://www.gov.uk/guidance/delinked-payments-replacing-the-basic-payment-scheme

The Chancellor, Jeremy Hunt, will give his Autumn Statement on the economy on Wednesday 22nd November.  With Government finances stretched, there seems little fiscal room for new policies to be announced.  However, with a General Election in 2024 or early 2025, and the Government well behind in the polls, the Chancellor may wel be tempted to pull a ‘rabbit out of the hat’.

A few items relating to the SFI  to update readers on;

Expression of Interest (EoI)

The requirement to submit an EoI prior to a Sustainable Farming Incentive (SFI) application is no longer required.  Those who wish to apply for SFI can do so via their Rural Payments account.  However, those farming on Commons should continue to express their interest with RPA so it can help them with an application.  More information on applying can be found via https://www.gov.uk/guidance/apply-for-an-sfi-agreement .

SFI 2023 Payments

Defra has announced that those who were invited to take part early on in the ‘controlled rollout’ of SFI 2023 have received their first payment under the scheme.  Farmers whose agreement commenced on 1st October 2023 have received the ‘accelerated payment’.  This payment is worth 25% of the annual value and is paid in the first month of the agreement (see article https://abcbooks.co.uk/sfi-accelerated-payments/).  According to Defra, as of mid-October there has been over 14,000 EoIs made under the SFI and almost 1,000 agreements have been offered.

Closure Payments

All SFI 2022 agreements will be terminated and holders should all now have been informed when their agreement will end; this should coincide with a quarter end date.  Defra has said if anyone would like to leave their 2022 agreement even earlier they can contact RPA to discuss their options.  On termination, holders will receive a payment.  This could be made up of three different elements;

• a final quarterly payment
• a management payment (based on the length of time in the agreement)
• a closure payment – this is to cover any financial loss resulting from the transition from the SFI 2022 to SFI 2023.  This may not be due to all, our article https://abcbooks.co.uk/sfi-2022-closure/) detailed the closure payments.

When agreements are near their closure date, RPA will calculate the final 2022 payment due and it will write to all agreement holders detailing how to make a closure declaration.  If agreement holders have complied with their agreement requirements up to the point of closure they will not have to repay any money received.

 

A further round of the Countryside Stewardship Facilitation fund is now open for applications and will close on 15th January 2024.  The Fund supports groups of farmers and landowners in England to come together to share knowledge, coordinate action, support environmental priorities and join agri-environment schemes.  This is achieved by funding a facilitator to organise workshops and offer support, advice and training to the group.  The emphasis in this round will be on;

• increasing biodiversty and supporting priority species
• net zero
• water management (including beaver management)
• air quality

Defra has also announced some further changes to the scheme requirements, these include;

• a reduction in the minimum area per application from 2,000 Ha to 500 Ha
• removal of landlord consent
• increase in facilitator rates
• refreshment reimbursement (£10.50 per head)

There is also a new guide to help with the application process, this can be found via https://www.gov.uk/government/publications/facilitation-fund-2024-countryside-stewardship  .  The facilitator makes the application on behalf of the group.  The scheme is competitive, meaning all applications are scored and only those offering the highest scores will be offered funding.  Agreements are for three years and will commence on 1st June 2024.

Three of the four Agri-Tech centres have announced they will merge.  The three Agri-Tech Centres are Crop Health and Protection (CHAP), Centre for Innovation Excellence in Livestock (CIEL) and Agricultural Engineering, Precision and Innovation Centre (Agri-EPI Centre).

Together they are being invited to develop a proposal to establish an Agri-tech Catapult which has the support of Innovate UK.  Established by Innovate UK, there are nine existing Catapults; these are  technology and innovation centres spanning over 50 locations across the UK, which aim to transform the UK’s capability for innovation in sectors of strength.

Speaking at the UK Agri-Tech Centres’ ‘Accelerating Innovation Conference’ the three merging Agri-Tech Centres outlined how plans to become a single organisation are ‘developing at pace’ and that the new business will be a hub for agri-tech innovators to thrive and will deliver ‘huge benefits to the agri-industries sector, and to the wider UK economy’.  It will also provide advice and coordination to access critical funding and wider Innovate UK programmes, such as Horizon Europe and the Farming Innovation Programme.

The fourth Agri-tech centre, Agrimetrics, which focuses on the use of data in farming, is to remain independent.  

No agricultural trades have been included on the latest Shortage Occupation List (SOL).  This follows a major review carried out by the Migration Advisory Committee (MAC).  The report, which can be found at https://assets.publishing.service.gov.uk/media/651557b86dfda600148e37ba/Review_of_the_Shortage_Occupation_List_2023.pdf  recommends eight occupations to be included in the List.  However, none are within the food and farming industry.  This will be a major disappointment to many in the agricultural sector who are having real difficulty in recruiting labour.

However, the Committee has reported that it is not convinced that the SOL provides a sensible immigration solution to shortage issues in low-wage sectors, and says its preference is for the Government to abolish it.  Instead, it suggests that the MAC could be commissioned to examine individual occupations or sectors where labour market issues seem particularly acute, possibly in collaboration with other bodies.  Its concerns arise due to a big change under this Review.  It has been conducted on the basis of its recommendation that no employer should be able to pay below the ‘going rate’ regardless of whether there is shortage.  Previously, being on the SOL allowed employers to pay 80% of the going rate.  As a result of removing this discount, most occupations currently on the SOL are ineligible going forward.   This change would also mean that only low-wage occupations would be eligible to be listed on the SOL, leading to concerns from the Committee that this can lead to worker exploitation and higher administrative costs for employers.

The SOL identifies occupations where employers are struggling to recruit sufficiently from the domestic workforce and migration is considered an appropriate alternative.  Inclusion on the SOL grants an occupation more favourable migration conditions, with the aim to increase the number of applicants for a role and reduce labour shortages.

Higher Level Stewardship (HLS) agreements coming to an end in 2024 may be offered a 4-year extension.  The RPA has said that Natural England (NE) will assess expiring agreements to see if they meet the necessary criteria (i.e no breaches, options remain appropriate for the priority target features on the holding etc.) and, where appropriate, will recommend that RPA offer an extension.  Extensions will not be available on holdings with unmanaged SSSIs or Scheduled Monuments that need to be under scheme options.  The extension will run from the end date of the current agreement.  Within the 4-year extension, in consultation with RPA, it will be possible to leave an agreement at any point as long as certain criteria is met including being accepted onto another environmental scheme which offers the same or greater environmental benefits.

Over the next few months those with an HLS agreement due to expire in 2024 which meet the criteria for an extension, will receive an offer from RPA before the current agreement expires.  The RPA will contact those not eligible for an extension in time for them to apply for a new scheme.  If an agreement has already been extended it may be possible to extend it again.  Further information including eligibility requirements can be found at https://www.gov.uk/guidance/higher-level-stewardship-2023-agreement-extensions?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=7dc6a72f-88ae-421a-ab5e-e4c36d78a993&utm_content=daily.

The Agriculture and Rural Communities Bill was introduced to the Scottish Parliament on 29th September 2023.  This will provide the overarching powers to implement future agricultural policies and includes the following objectives;

• the adoption and use of sustainable and regenerative agricultural practices
• the production of high quality food
• the facilitation of on-farm nature restoration, climate mitigation and adaptation
• enabling rural communities to thrive.

The Bill follows a consultation which ran from September to December 2022 and introduced the four-tier framework for future agricultural support payments (see our article of September 2022 https://abcbooks.co.uk/future-farm-policy-in-scotland/).  The Bill does not include the detail of these payments, that will be included in secondary legislation and is likely to be published later in 2024, if the Bill becomes an Act in the coming Spring.  The Bill can be found via https://www.parliament.scot/-/media/files/legislation/bills/s6-bills/agriculture-and-rural-communities-scotland-bill/introduction/bill-as-introduced.pdf

The majority of Welsh farmers will have received their BPS 2023 advanced payment.  The Rural Affairs Minister, Lesley Griffiths announced that 96% of claimants were due to receive 70% of their estimated claim value by 12th October.  Furthermore, slightly different to other years, Rural Payments Wales is operating a ‘payment window’ this year running from 12th October to 15th December, meaning for those who have not received their payment on the first day, but whose claim is subsequently validated before 15th December, they will receive an advanced payment.  Full and remaining balances will be made from 15th December 2023, subject to full validaton of the BPS claim.  Key Farm Facts includes estimated payment rates.  Actual rates will be known once all claims have been verified.

 

Defra has announced it will be opening Round 2 of the Slurry Infrastructure Grants in November.  It has also already published the full guidance to help farmers prepare in advance, this can be found at https://defrafarming.blog.gov.uk/2023/10/12/slurry-infrastructure-grant-guidance-now-available-for-round-2/ .  In summary, the grant provides funding of between £25,000 and £250,000 to improve on-farm slurry storage to go beyond legal minimums.  Defra has also announced, based on feedback, that Round 2 will have the following five changes compared with the first round;

• Pig farms will be funded for up to 8 months storage to allow pig producers with less land to safely store organic nutrients until they can spread it or export it.  Cattle farmers will remain at 6 months.
• Grant towards a slurry separator can be part of the project to increase storage capacity.
• Support for covering existing stores that are fit-for-purpose with impermeable covers.
• Adding the option to build in-situ cast concrete stores as an alternative to circular and panel stores, lagoons and bags.
• Introducing an option for landlords to underwrite grant funding agreements.

Due to these changes Defra will contact all Round 1 applicants with a ‘time-limited’ opportunity to update their application if they want to change it to include these updates.

In terms of managing demand, Round 1 was heavily oversubscribed.  Defra has said it will be able to invite more projects to submit a full application this year and is encouraging everyone who would like a grant to submit and EOI when the online checker opens wherever they are located.  It says if it does have to limit applications, it will ensure public money is targeted to where it will make the biggest environmental improvements.  It will prioritise projects in areas where coordinated action is needed to reduce water and air pollution from farming.  However, these areas have been significantly increased for Round 2 (these areas can be viewed on MAGIC Maps (see https://magic.defra.gov.uk/magicmap.aspx) by selecting Slurry Infrastrcture Grant – Round 2 (England)).  Furthermore, those who aren’t shortlisted in Round 2, will have another opportunity to apply in 2024, where Defra will look to further widen the target areas. 

To get ready for the opening of the online checker, applicants can work out how much slurry storage they require to reach the scheme storage requirements.  This must be done using the latest version of the AHDB’s Slurry Wizard (see https://ahdb.org.uk/slurry-wizard).

Defra has also answered a common question it receives – whether all slurry stores will need to be covered by 2027?  It has said ‘we do not expect that any new rules will require existing stores to be covered with impermeable covers by 2027’.