8th October 2021

Many of you will be wondering how the replacement of BPS with the new DEFRA schemes, is going to fit in with the phasing out of the BPS payments. DEFRA have brought in 3 methods in which they plan to phase-out and reduce the payment over the Agricultural Transition Period (ATP) which will help  support Farmers and Land managers to a stable release from the BPS payments. These 3 methods are:

• Phase-out of Direct Payments
• Lump sum exit scheme
• Delinked payments

With the industry conditions being very unpredictable at this current time, not all these strategies will be of choice necessary to the Farmer or Land manager directly. Being within an industry that has seen very little change in the last few decades, options within the Phase-out of Direct payments will allow for Farmers and Land managers to not directly lose the support from the BPS scheme but will gradually see the reduction and phase out of the sum of money they are used to. This action is taken over 7 years, starting with the BPS payment in 2021. The ceiling to which BPS payments total too, will be reduced every year but can allow for planning through the calculator in which DEFRA has created. This Farmers and Land managers can use to forecast and calculate their business plan and action is for the coming years. This is supported by the idea that Direct Payments are being reduced by around 15% every year for 2 years (2022-2023).

Yet again referring to farming seeing very little change this is also reflected in the people involved in such agricultural industry. As we see in the Lump Sum Exit scheme, which has been released to help Farmers to exit farming through retirement for example to exit with a sum of money instead of Direct Payments. Without the BPS payment for many Farmers that have received it for many years over their career would be of great shock. This scheme will therefore allow anyone who has been previously accessing BPS payments to receive the “pay-out” as such of the industry. These will start coming into place from 2022, but more information will be released soon. The reasoning behind this supports DEFRAs new scheme of the “New Entrant Support Scheme” which will help to generate space for which the new entrants can access, as well as providing the next generation of Farmers for the industry. Therefore as a result of this it will allow for new ideas, and has potential to turn the agricultural industry to a more sustainable way.

The Agricultural Transition Plan (ATP) starting in 2021-2028, will no doubt see some great change, but with the new schemes and incentives already put in place which can be accessed many start of 2022 will provide easing to a more sustainable farming transition a lot easier. The Delinked payments  set to replace BPS payments up until 2027, will allow for the option of farmers and land managers to no necessary have the direct link of farming them. Delinked payment will be in action totally by 2024 when the Direct Payments has been reduced by 50%. Farmers and other land managers can therefore diversify for example and still receive the delinked payments.

I believe it is more than important for Farmers, Land managers and other Stakeholders not be concerned through this transition, as DEFRA have made replacement schemes for in which are arguably more accessible, from being focused in a wide range of specific areas. The Agricultural Transition Plan (ATP) is set to help support yourselves as Farmers and Land managers to supply the need for such inventories and incentives helping to benefit the production and sustainability of farms, woodlands and land in and around England. It is also very important to remember that all the money they are saving from the reduction in Direct Payment, the Government will put back into existing schemes and other grants to in which will allow Farmers to run and support their businesses in a more sustainable way running in line with DEFRA’s vision for 2028.

For more support or questions about Direct Payments, Lump Sums and Delinking please contact;

Pip Maddocks- philippamaddocks@rogerparry.net or Oswestry Office on 01691 655 334, oswestry@rogerparry.net