Category: Policy & Business

The RPA has started to make BPS advance payments to farmers in England as of 19th July.  The agency expects the majority of farmers to receive their advance payments by the end of the month.  Although, for a small number of claims which require additional checks, the process will unfortunately take longer.  These are usually those in probate, subject to inspections or large ‘complicated’ claims.  The RPA has said it will be in touch with those affected.

Advance payments will be 50% of the estimated full payment.  The proportionate amount of the % deductions under the Agricultural Transition will be applied to both the advance and balance payments.  Those who have applied for the Lump Sum Exit Scheme and claimed the BPS in 2022 will also receive an advance payment.  Balance payments are expected to commence at the usual time in December.  Although the twice-yearly payment structure has been brought in this year to help with cashflow issues, the RPA has confirmed this will be a permanent change to BPS payments in England.

The Organic Conversion Scheme (OCS) opened in Wales for Expressions of Interest (EoI) on 18th July and will close on 26th August 2022.  This is another grant which will be available over the next three years to assist Welsh farmers during the transition to the new Sustainable Farming Scheme (see https://abcbooks.co.uk/welsh-schemes-open/).  The Organic Conversion Scheme is a 5-year contract, which will provide support for conversion of eligible land to organic production and towards the cost of certification in the first two years of the contract only. As a condition of these payments, claimants must maintain continuous organic certification for the remaining three years of the contract, once full conversion has been achieved after the first two years. 

Application is via farmers’ RPW online accounts.  The scheme is competitive and Expressions of Interest (EoIs) delivering the most positive environmental land management practices that contribute to the overarching aims of the scheme will score more highly.  These include:

• Reducing Carbon and Green House Gas emissions
• Building greater resilience into farm businesses by adapting to climate change
• Managing water resources to improve water quality and reduce flood risks
• Contributing to economic sustainability of farms and the rural community
• Protecting and improving the natural landscape and the historic environment
• Developing and improving Wales’ native biodiversity

Geographical Information System (GIS) (digital maps) layers will inform where specific objectives of the OCS can best be delivered.

Payments

Payment rates will be based on the land use as submitted on the SAF 2022. Although contracts are for 5 years, payments will only be made during the first two years to support the conversion to organic production.  The table below summarises the rates for the different land use;

All of an applicant’s eligible land, that they have management control over and is not already registered as organic, must be included in the EOI.  Although there is no upper limit to the area of land that can be submitted, payments will be capped as follows:

0 to 200 ha   –  100% of payment rate

200 to 400 ha  –  50% of payment rate

400 ha +  –  10% of payment rate

If the holding has different land uses, the highest paying rate will be considered first.

If an EoI is offered, it must be accepted within 30 days and the agreement will commence on 1st January 2023.  The full guidance can be found at https://gov.wales/organic-conversion-scheme-guidance-html  Previously support for organic conversion in Wales was via Glastir Organic but this has been closed to new applications since 2016.

 

 

 

 

 

 

 

 

 

 

Defra has announced the next phase of the Future Farming Resilience Fund (FFRF) will commence in October 2022.  Through the FFRF, BPS claimants in England can receive free business advice during the early years of the Agricultural Transition.  Under this latest, and final round, 17 organisations will receive a total of £32m to support up to 32,000 farmers.  The various providers will offer different kinds of support and across different agricultural sectors.  Some will offer one-to-one farm visits with recommendations included in a written report, whilst others will provide workshops, webinars, tours or networking opportunities.  Farm businesses can choose who they would like to receive their advice from.  The current ‘interim phase’ of support closes in August; 6,600 farmers have so far accessed this free advice.  The next ‘scaled-up’ phase will run until March 2025, when the scheme will end.  Once again, Andersons’ consultants will be delivering one-to-one farm advice in partnership in association with Ricardo-AEA Ltd.  See https://defrafarming.blog.gov.uk/2022/07/14/free-business-advice-next-phase-to-start-in-october/ for a full list of providers.  

 

The Nutrient Management Investment Scheme is now open in Wales and will close on 12th August 2022.  This is one of a number of grants which will be available over the next three years to assist Welsh farmers during the transition to the new Sustainable Farming Scheme (see https://abcbooks.co.uk/welsh-schemes-open/).  The Nutrient Management Investment Scheme supports infrastructure and capital investments in equipment and machinery that addresses the impact of on-farm pollution; offering clear and quantifiable benefits to farm businesses and the wider environment.

Grants, of up to 40%, will be available to purchase items which enhance on-farm nutrient management, protect and enhance water, soil and air quality, improve on-farm resource efficiencies, technical performance, and the use of technology to improve management decisions.  There is a list of eligible items which can be found via https://gov.wales/nutrient-management-investment-scheme-list-eligible-capital-items.  The investment must meet or exceed the minimum specification described.  Second-hand equipment is eligible where the applicant can demonstrate it complies with current health and safety legislation, is fit for purpose, and as at least five-years life expectancy remaining.  One application per window will be allowed, with a maximum grant worth £50,000 and a minimum of £12,000.  All items must be purchased and claimed by March 2025.

 

The annual compendium of farming statistics, ‘Agriculture in the UK’ has been published by Defra.  The document covers all of the UK, and is the most comprehensive and authorative set of data on the farming and food sector.  The latest edition covers up to the 2021 year and can be found at – https://www.gov.uk/government/statistics/agriculture-in-the-united-kingdom-2021?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=f6e7b3df-3b7e-4811-b127-6503ec1adbf9&utm_content=daily

Defra has seen relatively few change in its Ministers, despite all the political turmoil in Westminster.  In the wave of Ministerial resignations that led to Boris Johnson’s exit, only the junior Ministers Rebecca Pow and Jo Churchill quit their Defra posts.  The Johnson loyalist, George Eustice, remains as Secretary of State and Victoria Prentis continues with the farming portfolio.  Rebecca Pow has been replaced by Steve Double, MP for St Austell and Newquay.  It does not appear that Jo Churchill’s position has been filled.  Of course, once the Conservative leadership election has taken place, and a new Prime Minister installed, they are likely to want to appoint their own team.  There is then likely to be a further change in the Defra Ministerial team.  It would be surprising if this led to a change in policy direction though – the key elements of the Agricultural Transition in England look set to continue.      

At the end of last month, the Committee on Climate Change (CCC) presented its latest Progress Report to Parliament.  The overall summary would be ‘must-try harder’.  The report states that, although there is a clear policy ambition, a strategy and measures to actually deliver the goals in the timeframe outlined is lacking.  In terms of farming, the CCC describes progress in cutting GHG as ‘glacial’.  The Committee goes on to add that ‘agriculture and land use have the weakest policies, despite being vital to delivering net zero and the Government’s other goals on food security and biodiversity’.   The full report can be found at – https://www.theccc.org.uk/publication/2022-progress-report-to-parliament/#key-messages

A decline in the value of Sterling, especially against the Dollar, has gone somewhat un-noticed over the past few months.  This is partly as the Dollar has always enjoyed ‘safe haven’ status which means its value tends to rise in times of political and economic uncertainty.  The Pound has come under particular pressure as traders believe the UK economy will be more affected by inflation and cost-of-living pressures than others.  The fevered political situation in Westminster has not helped but the Pound has strengthened slightly since Boris Johnson announced his resignation.

As we have pointed out before, a weak Sterling is generally good for most parts of UK agriculture.  It makes our exports more competitive on world markets, and makes imported food more expensive here (although this is not so good for consumers and a further source of inflation).

The Welsh Government has outlined proposals for the new Sustainable Farming Scheme, which will replace the Basic Payment Scheme and will be the main source of future support for farmers in Wales.  The Scheme will have actions under five themes or ‘characteristics’ to support farmers in a variety of ways to help them deliver a wide range of  outcomes alongside sustainable food production.  The five characteristics are;

• Resilient and productive
• Reduce, reuse and recycle inputs, nutrients and waste
• Reduce on farm emissions and maximise carbon sequestration
• Protect and enhance the farm ecosystem
• Benefit people, animals and places

The sustainable production of food and the actions to deliver environmental outcomes are seen as complementary and not competing agendas.

The Proposals

The new Sustainable Farming Scheme (SFS) will have three layers; Universal, Optional and Collaborative – each containing a set of ‘actions’.  All Universal Actions have to be carried out by farmers who join the Scheme.  A ‘baseline payment’ will be made to farmers for undertaking the ‘Universal Actions’.  There will also be additional payments for those farmers who choose to undertake extra ‘Optional’ and ‘Collaborative Actions’.

Universal Actions – the aim is for these to be practices that most farmers will be able to undertake and that can be integrated into the current farming practice.  Farmers will be expected to perform the Universal Actions to receive their baseline payment, these will include;

• • Managing and enhancing (semi-natural) habitats across at least 10% of the farm, or creating new habitat features where existing habitat does not exist
  • Having at least 10% tree cover on farm (in addition to the above) managed in line with UK Forestry Standard
  • Managing new and existing hedgerows in line with the hedgerow management cycle
  • Having a multi-species cover crop on all uncropped land over winter
  • Restoring, managing or creating ponds or scrapes (temporary ponds)
  • Ensuring biosecurity measures are in place to reduce the risk of spreading diseases and ensure farm boundaries are secure
  • Completing an annual benchmarking self-assessment against a minimum of the sector and industry KPIs to improve business performance
  • Carry out soil testing (N, P, K, Carbon and pH) at Scheme entry and in time for contract renewal including, biological measures (e.g. worm counting) and physical assessments (e.g. Visual Evaluation of Soil Structure)
  • Completing an IPM assessment; collecting and record data on Plant Protection Products use
  • Working closely with their vet through the Animal Health Improvement Cycle (AHIC) and reporting on farm antibiotic use
  • Maintaining and enhancing the historic environment, beauty and heritage where identified on holdings
  • Completing a level of learning, including Health and Safety.

The majority of compulsory elements of nutrient and livestock management are already completed by farm assured businesses so there will not be too much change in that respect.  But for some it will be a lot of additional work and they will need support to comply.  The need for 10% of land in woodland plus 10% of land in semi-natural production will be quite onerous for some.

• Optional Actions – farmers will be able to choose which actions they undertake, these will be targeted towards specific land or landscape feature issues; these will include
  • Restore damaged peatlands through ditch blocking or re-establish vegetation
  • Grow crops to reduce the amount of bought-in feed
  • Establish new horticultural enterprises within existing farm businesses
  • Support for innovation projects which trial new techniques and technologies
  • Support for isolating incoming stock for 6 days and having a 3m wide fence and hedge farm boundary
  • Actions which impact a farm’s nutrient use and soil condition e.g. nitrogen fixing plants, crops with varied rooting profiles, min or no till
  • Use a graze-and-rest approach for 5 months of the year
  • Establish/maintain a mixed sward of grasses, legumes and herbs
  • Support for managing/creating woodland more than the 10% minimum coverage and for increasing the width of hedgerows on boundaries to 3m
  • Managing or enhancing habitats above the 10% minimum

The above is not an exhaustive list.  In the proposals, it is made clear that these are only proposals and that some of the actions may be changed based on feedback received through the second phase of co-design and additional features may also be included in the future.

• Collaborative Actions – these will be carried out in a coordinated way by multiple land managers at a landscape, catchment or national scale where they can deliver more than the sum of the individual parts; including
  • Support for working with other farmers across catchments to improve water quality
  • Support for innovation projects to help farmers work together to sell more directly to the consumer to add value
  • Support for projects to restore and manage peatland shared by multiple farmers
  • Collaborative support for producers who work together to promote genetic health from native breeds and come together to use native breeds to develop and maintain natural habitats and increase diversity.
  • Creating interconnected habitats across landscapes
  • Supporting projects which enhance the historic environment and designated landscape across multiple farms

Each farm business will need to complete a Sustainability Review before entering the scheme this is likely to include basic farm and land information  – the proposals say this will be similar to the Single Application Form, a Carbon Assessment and Habitat Baseline Review – the hope is for farmers to be able to use tools already available to minimise the burden and that this can be completed on-line.  Contracts will be up to five years in length.  No indication of payment rates have been given yet, these will be be informed by Government modelling and economic analysis which is still underway.

Under the proposals, there will be an advisory service together with farmer-to-farmer knowledge sharing to help producers carry out the actions.  This will be provided through a new Farming Connect programme, including a ‘redesigned’ advisory service.  Farming Connect will also include a Continuing Professional Development (CPD) Programme.

Timetable

Between now and 2024 the Welsh Government will support farmers through a ‘Prepare and Pilot’ phase.  As part of the ‘preparing farmers’, the Welsh Government would like to receive views and thoughts on the scheme and has launched the second phase of co-design so that farmers can give their feedback – see our article of 2oth June https://abcbooks.co.uk/sustainable-farming-scheme-wales/   Piloting will also take place over this period.  Furthermore it has been confirmed that there will be a transition period so that the SFS will not be introduced overnight.  The Welsh Government has confirmed, the proposals include a transition period commencing on 1st April 2025 and ending on 31st March 2029, this will mean that there is no ‘cliff edge’ in funding if farmers choose not to participate in the new SFS, with a ‘stability payment’ available during these years.

The Government is currently engaging with the sector during the next phase of co-design and a decision on the final scheme will not be made until further consultation on the detailed proposals and the economic analysis has been presented in 2023.  Full details can be found at – https://gov.wales/sustainable-farming-scheme-outline-proposals-2025