Defra has announced a much more rapid phasing out of the de-linked Basic Payment Scheme (BPS) payments for farmers in England than was previously expected.
While much of the focus following the Autumn Budget has been on the changes to Agricultural Property Relief (APR), industry experts have warned farmers that de-linked BPS payments will be phased out more quickly.
READ NOW:听Autumn Budget 2024: What do farmers need to think about?
Jonathan Armitage, Strutt and Parker head of farming, said: "Most farmers had been expecting a continuation of the existing path to a zero payment by 2028.
Basic Payment Scheme
"In fact, no farmer will receive more than 拢7,200 from next year. For a farmer who received a payment of 拢100,000 (about 429ha) in 2020, the total payment will be more than 拢40,000 less over the period 2025-2027 than anticipated.
"This will clearly have a negative effect on farm businesses' cashflows and profits. Significant differences in approach are becoming clear between the devolved administrations as far as future farm support is concerned."
READ NOW:听Defra Secretary says Government's commitment to farmers 'remains steadfast' after Budget anger
Nick Mullins, chartered surveyor and environment advisor for H&H Land & Estates, highlighted the fastest subsidy reductions would apply to those who historically received the largest payment.
"For example, the top 4% of recipients 鈥� who received over 拢100,000 in BPS in 2020 鈥� will receive no more than 拢8,000 by 2025. In contrast, most farmers, who began with less than 拢10,000 in payments, will see a gradual reduction in their delinked payments but will continue to have access to funding through SFI and other schemes."
Autumn Budget
For 2025, the Rural Payments Agency will apply a 76% reduction to the first 拢30,000 of a payment, while making no payments for any portion of a payment above 拢30,000.听听
READ NOW:听Defra's 拢2.4bn Agriculture Budget at a 'tipping point'
Mr Mullins gave the example of a payment of 拢40,000, which would have a 76% reduction applied to the first 拢30,000 of the payment, a reduction of 拢22,800. A 100% reduction would be applied to the next 拢10,000, a reduction of 拢10,000.
The payment would be reduced by 拢32,800 to 拢7,200.听听
"This should surely see increases to SFI and stewardship rates, but we cannot predict this."
