Business Clinic: Advice to minimise ELS and greening losses

Farmers Weekly’s Business Clinic expert Felix Carter give advice on weighing up your options for Entry Level Stewardship and greening.

Q I have received a letter from Natural England (NE) and Defra confirming a reduction in the annual payment for my Entry Level Stewardship (ELS) agreement because some of my options overlap with the new Basic Payment Scheme (BPS) Environmental Focus Area (EFA) options.

I don’t need to use the ELS options for greening as I have other greening features I can use. Do I have to be penalised?

A Unfortunately, if your agreement started after 1 January 2012, the reductions in payment are made regardless of whether you need to use your ELS options to meet greening or not. This does not apply to HLS agreements or ELS agreements dated before 1 January 2012.

Felix CarterFelix Carter
Agribusiness Consultant
Savills Agribusiness

We are regularly asked why ELS payments should be reduced when many agreement holders are able to meet greening requirements by other means such as nitrogen fixing crops, cover crops or planned fallow areas as part of a rotational management programme.

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In many cases the reduction in payment is significant and those affected have three options:

One, simply accept the reduced payment and continue with your ELS scheme.

Two, amend the ELS scheme by finding more points and continue receiving your full existing payment. Not all options overlap with EFA greening options and those which do not have not been reduced in value.

Three, decide to end the ELS contract which in this case can be done without penalty

In order to help decide which option is best there is first a balance to consider between the practical and environmental benefit from ELS options in place and the economic benefit of cropping the land instead.

Relating your lower adjusted ELS payment to the area of land removed from arable cropping to qualify for the scheme will give you a gross margin a hectare to compare with the returns from the crops in your existing rotation.

From an environmental perspective, the value of options in place and the reasons for putting them in place in the original ELS agreement should be carefully considered before making a knee-jerk change.

The information provided in these articles does not constitute definitive professional advice and is provided for general information purposes only.

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