ELS makes economic sense despite high grain prices

High grain prices are causing farmers to delay renewing their entry-level stewardship agreements, with hundreds due to expire in the next six months.

Between now and 31 March 2013 there are 1,500 ELS agreements, covering 140,000ha in England, up for renewal, Natural England said.

But for some farmers, the decision to renew existing schemes is not straightforward this year.

A bad harvest has sparked rising food prices and with wheat currently fetching about £200/t, farmers will not be keen to take high-value land out of production, but this must be balanced by rising input costs.

Add to this the uncertainty over how CAP reform post-2013 will affect agri-environment schemes, especially the so-called “greening” of direct payments, and persuading farmers to renew could prove difficult – despite DEFRA’s pledge that the reforms will not penalise farmers.

In spite of all this, Geoff Sansome, director of land management at Natural England, said farmers should “not be swayed” by high commodity prices, as there was still an economic case for environmental schemes, such as ELS.

“ELS is a relatively small amount/ha, but it is long term, stable and a reliable contribution,” said Mr Sansome.

“We have had a terrible year weather-wise, especially in the West. But it’s a year like this that reminds us that some of the best areas of wildlife are the least productive for cropping.

“It reminds us why you take some of those awkward corners, more heavy soil types or poor drying areas and areas of land close to ditches out of production.”

An overhaul of the scheme means that from 1 January 2013 there will be fewer points available for the more popular ELS options, such as buffer strips and hedgerow management.

Agri-environment scheme facts

  • Two-thirds of agricultural land in England is covered by environmental stewardship
  • Entry-level stewardship is the biggest ELS scheme, covering 6m ha (63%) of agricultural land
  • Since March 2012, an additional 205,000ha of land has been entered into ES schemes
  • Since ELS was introduced in 2005, the historical renewal rate is 75%

The changes to ELS mean farmers will have to focus on priority options to meet the requirements of the scheme.

Details of the new and amended options were published this week in the fourth edition of the Environmental Stewardship Handbook for ELS.

Mr Sansome said: “ELS is seven years old and we have listened to farmers and changed about 10 ELS option prescriptions.

“We have introduced five new options, which will appeal to many farmers, such as feeding farmland birds. In about nine of the options we have reduced the points. Where we have reduced points, we would expect farmers to reduce these options and vice versa. But there are still 60 options to choose from.”

Oliver Lee, senior business consultant at Andersons, said the majority of farmers he worked with – between 80-90% – had already or intended to renew their ELS agreements.

“Generally, if ELS worked before for farmers then it will work going forward in terms of the new options,” he said.

“If options are located in the right places, in lower-yielding parts of the farm, then economically it still pays to be in ELS.”

Hertfordshire grower Robert Law said he would be renewing his ELS agreement, even though Natural England is “raising the bar in January”.

“Grain is fetching £200/t and farmers will be asking themselves why they are taking land out of production,” he said.

“I know a lot of farmers won’t be renewing, as they don’t want to lock themselves up for five years, which I think is short-sighted.

“Whatever happens, we must enter these environmental schemes. The threat of a return to a compulsory set-aside scheme has not gone away.”