ELS overhaul: scheme changes may force out farmers
More than 60% of England’s farmland is now under ELS management. But the effectiveness of the scheme and the environmental benefits delivered have been called into question and changes are afoot.
As if that wasn’t enough, there’s the spectre of 7% of land being required for Ecological Focus Areas under the new Basic Payment Scheme. At this stage it is unclear how ES schemes will fit with CAP reform, making decisions at farm level very difficult.
The current regime, based on a pyramid of cross-compliance for all at the base, a demanding HLS-equivalent for a few at the top and an ELS-equivalent in the middle is likely to remain, though the names may change.
| WET WEATHER DEROGATIONS |
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| Agri-environment scheme holders struggling to meet requirements thanks to this summer’s rain should apply now for a derogation from Natural England, said NFU countryside adviser Clare Robinson. “Due to the wet weather you might not be able to make hay, you could have poaching problems or be providing supplementary feeding,” she said. “Issues like this mean you will need a derogation to make a temporary change to your options from Natural England.” Under ELS, agreement-holders must inform Natural England before making any management alterations. You can begin any changes as soon as the derogation notice form has been returned to the agency. Under HLS agreements, the derogation has to be agreed in writing by Natural England before any action is taken. The same applies if the derogation affects a Site of Special Scientific Interest or an archeological site in an ELS agreement. |
The question of where the greening element of CAP reform will sit is more difficult. Keeping the pyramid theme, greening may sit above cross-compliance, making ELS and HLS more demanding.
Meeting UK cross-compliance is widely accepted to be more difficult than meeting the requirements elsewhere in the EU, so perhaps greening will sit above the top-end of cross-compliance and take points out of the bottom end of ELS. The complication of the three-crop rule also has to be accounted for.
Either way, the rules are clear that no recipient can be paid twice for the same benefit, so it seems logical that ELS will have to become more demanding, or a choice will have to be made between the ELS payment and the greening payment.
This, in effect, is what Natural England has suggested. As and when greening rules are known, farmers in ELS can choose between topping up their ELS with extra options to meet CAP reform greening requirements or leaving the scheme entirely.
All this makes sense, save that in 2013 ELS is going to become more demanding in any event. Natural England has launched a revised 2013 scheme under the banner of “Making Environmental Stewardship More Effective”.
In brief, this involves cutting the points rate on less beneficial options, introducing new options and upping the points rate on existing beneficial options with low uptake.
The difficulty will be that for many farmers “less beneficial” equals easier and that the low uptake rates are low precisely because farmers are wary of making such a commitment for a five-year term. So will the changes result in a shift toward the more beneficial options, or will there simply be an exodus from ELS?
A quick analysis of draft changes for three recent ELS renewals shows the pre- and post-January 2013 impacts (see table, left). Upland farms it seems, will see negligible changes. However, the results show an average points reduction of 17% over these three farms. Although a very small sample, this illustrates an important point – where would these farmers find sufficient points to recover the 17% deficit?
Looking at the range of new and amended options, the answer is either to take land out of production altogether or commit to much more fundamental changes to farming practices – for example, overwintered stubble options that necessitate a fallow period or spring cropping, or unharvested cereal headlands where attention to detail at the appropriate time is vital.
If ELS becomes more demanding, so must HLS. But will making the schemes tougher truly deliver improved environmental benefits?
| MAKING UP POINTS |
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| Short of points under the revamped scheme? Consider a wider range of options, including the ones being introduced in 2013, said Natural England’s Annabelle Le Page. For example: Use EB3 “Enhanced hedgerow management” on hedges instead of the more basic hedgerow options EB1 and EB2, especially since the cutting restrictions on EB3 are being made more flexible. Alternatively, add the new hedgerow restoration option EB14 where a hedge would benefit from laying or gapping up. If walls are ineligible for EB11/UB11 wall maintenance options due to the tighter eligibility criteria, consider UD13 “Maintaining visibility of archaeological features on moorland” (53 points per 50m of linear feature) if they are historic walls marked on the Environmental Information Map. Add new option EE12 supplement to add wildflowers on to buffer strip options or field corners, to boost biodiversity and the points value of these areas. |
More than a few farmers have seen their farmland bird numbers decline since the farm went into ELS. This contradicts the recent findings by the British Trust for Ornithology which show that ELS has slowed the rate of decline.
Why the difference? The answer may well lie in that fact that those reporting a decline are on the edge of villages that opted for 4m and 6m margins and have seen those margins heavily used by dog walkers. This has caused more harm than good – there might be more nesting habitat but the frequent disturbance to nesting birds negates that otherwise beneficial development.
Leaving aside the issue of casual trespass, this highlights one of the major problems with ELS. The range and combination of options available has to be wide enough to encourage the uptake rate with which Natural England have been tasked, yet be environmentally robust enough to deliver real benefits.
A key question for the policymakers is whether this actually works. Would a greater overall benefit be delivered by fewer, better-targeted agreements, with the remainder following less robust “greening measures” under CAP reform?
My opinion is that the ELS uptake rate is likely to fall post-2013. A frequent complaint from farmers is that the payment rates have not been reviewed since 2005, when wheat was £66/t while the markets have recently topped out at more than £180/t.
Natural England’s answer is that the payment rate is based on income foregone and that costs have risen with price rises. This may well be true, but the decision to enter ELS was partly risk-based.
Taking out marginal land at a time of low wheat prices was one thing. Committing viable land to potentially demanding schemes in volatile markets is quite another.
Yes, the income is secure, but the possible rewards sacrificed are significant, particularly when it is still unclear quite how ELS agreements will be treated under CAP reform, though the ministerial line is that no one should be disadvantaged by taking up an agreement.
| IMPACT OF PROPOSED ELS POINTS CHANGES ON THREE FARM TYPES | ||||
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| Farm type | Area (ha) | Current points | Points under post-2013 agreement | % reduction |
| Livestock/arable | 364 | 10,920 | 8,493 | 22 |
| Arable | 490 | 14,700 | 11,814 | 20 |
| Dairy/arable | 195 | 5,850 | 5,249 | 10 |
| Recent ELS renewals based on real farm examples | ||||
For those able to enter or renew before January 2013, it would seem sensible to do so, securing several years of payments before regime change and dealing with whatever happens in respect of CAP reform as and when the rules are known.
For those not able to enter or renew before 2013 the decision will be more difficult. My advice will be to consider very carefully the possible options, to take professional advice on the potential impact on the farm – for example will wild birdseed mix really grow there? – and to base the decision on whether or not the additional income is sufficient to justify accommodating the scheme, possibly plus greening amendments, for the full five years.
Although the income from the scheme makes a vital difference to many, ELS does not have the monopoly on environmental benefits: everyone can implement any of the options on a voluntary basis and deliver real benefits from doing so.
For those in two minds, don’t neglect the third possibility, which is to instigate some voluntary management in line with the most suitable ELS options for your holding until the picture is clearer.
This gains breathing space, preserves flexibility, delivers environmental benefits and contributes to the Campaign for the Farmed Environment.
Simon Britton is a partner at Strutt & Parker, based at the firm’s Northallerton office in North Yorkshire – simon.britton@struttandparker.com, 01609 785 462
Experts from Natural England are hand on our ELS website forum to answer your questions about the new rules. Simply post your questions anytime between 10 and 24 August, and NE will endeavour to answer within 48 hours.
Read more on the ELS changes.