For many farmers, the Countryside Stewardship Scheme looked a big commitment for little financial gain.

But CAP reform has radically altered that, says James Jones, head of farm management at the Royal Agricultural College.

Dr Jones told farmers visiting Allenford Farms, a 730ha (1800-acre) mixed farm near Damerham, Hampshire, that CAP reform had dramatically boosted income earned from CSS since farmer Rob Shepherd entered a 10-year agreement in 2001.

At the farm walk, organised by the John Edgar Trust, Dr Jones said:

“Under the IACS system, DEFRA’s estimate of farmers’ income foregone and the payments to cover that loss were pretty accurate, in this case leaving a net gain of just £607.

That doesn’t excite.

Include Mr Shepherd’s management time and the figure would have been in deficit,” he added.

“Arable Area Aid accounted for most of the loss, coupled with lost income from crop production.

Now, with subsidy stripped out of gross margins, income loss can be quite low, by taking out only lower-yielding areas like field headlands.”

For example, under the old system, CSS two-metre margins accounted for 9.4ha – a loss of £3083 in subsidy and crop income.

Severing the link between farm support payments and crop production meant CSS payments were worth £8750 more.

“Most of that increase is because the environmental payments no longer have to compete with subsidies,” said Dr Jones.

“It was never the government’s intention that farmers should profit from agri-environmental schemes – annual payments were granted to reimburse farmers for income foregone and additional capital costs from the commitment made to the scheme,” said Dr Jones

“Payments are tied to DEFRA’s estimates of income foregone and it is likely they will be revised.”

But CSS could also have implications for a farm’s balance sheet, said Dr Jones.

“Capital works like hedge planting could boost the land’s amenity value.

But farmers need to be aware if they do sell, they are selling the CSS commitment as well.”

ian.ashbridge@rbi.co.uk