October 28, 2021


Basic Payment Scheme (BPS) is being phased out so that by the year 2027 it will not be paid, as it currently stands for farmers in England. There will be different subsidies available but overall, the cash available will be much lower, with some sectors being worst hit than others.

For example, a dairy farm producing 2M litres of milk a year, receiving £30,000 of BPS, this will equate to a loss of 1.5 pence per litre per year; an arable farm of 500 acres producing 1,500 tonnes of crops and receiving £45,000 of BPS equates to losing £30 per tonne per year and a beef and sheep farm selling 1,000 lambs and 60 stores a year, receiving £40,000 of BPS, could equate to a reduction of £28 per lamb and £200 per beef animal per year.

Hopefully the new Environmental Land Management Scheme (ELMS) will fill some of this gap but there will be less in total to go around; so what can you do about it?

Monitor your costs and benchmark your business against industry standards. Are there ways to reduce costs without sacrificing productivity or profits?

Look at reducing your annual outgoings, such as debt repayment, hire purchases and capital expenditure. Could you hire machinery rather than buying it or use a contractor? Machinery sharing with a group of farmers or share farming might also be beneficial.

Can you increase output or maximise your income from what you do? Could you change your calving pattern to improve the price for your milk, or would moving lambing increase your returns or can arable crops be established cheaper without reducing your yield?

Can you diversify to bring in cash from other enterprises? What would suit your business? What will the initial costs be and what would the payback period be?

Find out what grants and other subsidies might be available to you, this might include speaking to an agricultural consultant who will know what is available and advise you accordingly.

There will no one size fits all approach on how to replace your BPS but if you can manage your business as best you can, then you will be a better place to adapt to survive and hopefully thrive. We are here to help and challenge investment proposals to make sure they are the right fit for you. Budgeting is important and can help you ensure you make the right decision for the future of your business.


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