The Agriculture Bill was published on 12 September. The Bill itself is 65 pages of legislation, which mostly deals with the legalities of allowing England, Wales and Northern Ireland the power to deal with agricultural policy going forwards.
Apart from confirming that the Basic Payment Scheme (BPS) payments will cease by 2027, the bill itself is of less interest than the associated press releases and explanatory notes.
There is a clear direction of travel, with regard to the future agricultural policy. This was set out in the DEFRA publication Health and Harmony. Farmers will no longer be paid for owning land, but will be rewarded for protecting and enhancing the environment.
Under the Agricultural Bill proposal, the BPS for farmers will be phased out by 2027.
The BPS will remain in its current form for 2019, and probably 2020, although DEFRA will look at administration of this to see if it can be simplified.
From 2021 to 2027 there will be a phasing out of the BPS with those receiving the highest level of payments bearing the greatest cuts.
The BPS cuts for 2021 have been announced by DEFRA as follows:
2021 proposed reductions to BPS
Direct payment band Reduction in BPS
Up to £30,000 5%
£30,000 to £50,000 10%
£50,000 to £150,000 20%
£150,000 or more 25%
The banding for the BPS reductions will work progressively. For example a farmer who currently gets £50,000 will have a 5% reduction on the first £30,000 and a 10% reduction on the next £20,000. They would therefore receive £46,500.
There is no indication of how the subsequent reductions will be applied, however if it is a straight line reduction, the £46,500 would fall by about £6,500 per year, with the 2027 scheme year being the final payment. This is a sobering thought for farmers.
In 2016 the direct payments to farmers totalled £1.65 billion. The good news for some is that as the direct payments are phased out the money saved is going to be used to pay for the new Environmental Land Management contracts. These are integral to the Government’s aim that payment to farmers and landowners should be for providing public good (whatever that might be).