“Yesterday’s big announcement has been widely anticipated in the industry but it lacks the detail we would have expected at this stage, just a short time before farmers are to be plunged into the agricultural transition process.  We know, for example, that BPS payments will start reducing in 2021 and will have halved by 2024. We also know that the new Sustainable Farming Incentive (SFI) will be made available from 2022 to 2024 to address this sharp fall in direct payments, however we won’t know until next year what the payment rate for SFI will be or exactly what farmers will have to do to get it. This makes it very difficult for farmers to set out budgets for the bumpy years ahead.

Having said this, the confirmation that all BPS recipients will be eligible for the SFI is to be welcomed. Government has listened to industry concerns that a sharp withdrawal of BPS payments would leave an unacceptable funding gap. Broadly speaking, the SFI will seek to encourage farmers into adopting a sustainable farming mindset prior to the full ELM rollout in 2024 and is expected to encompass simple, easy-access measures including management of soils and nutrients.

As the BPS starts to be withdrawn, funding will be redirected, not only into the SFI but also other environmentally-focused schemes, with the budget for Countryside Stewardship set to increase through 2022-23. The SFI is designed to run in parallel with and be complementary to any existing agri-environment schemes farmers are already signed up to which is reassuring news.

Some industry bodies say the government’s approach is not far-reaching enough and lacks the shake-up needed across the whole food supply chain. Whilst this may be true, the government has been wise to move away from the cliff edge of BPS cuts we were previously expecting to a system that will offer a much gentler transition. However, the devil is in the detail and this is what we are yet to see.”

For further information, contact Katie Hilton on katie.hilton@cheffins.co.uk