Questions over Defra plan to abolish farm payments

An expert in agricultural economics has questioned whether Defra will achieve its goal of abolishing direct payments by 2027.

Plans to phase out direct payments over seven years – ending in 2027 – are outlined in the government’s Agriculture Bill, published on Wednesday (12 September).

Direct payments – which account for more than half the income on many farms – will start to be simplified and then phased out after the UK leaves the EU.

See also: Analysis – How Michael Gove’s Agriculture Bill will reshape UK farming

Defra secretary Michael Gove wants to replace the payments with a new system of pubic money for public goods, largely requiring farmers to undertake environmental work on their land.

But Ian Bateman, director of the Land, Environment, Economics and Policy Institute at Exeter University, questioned whether the government would meet its target.

Professor Bateman said: “The intention to end the public subsidy of massive farms just because they are big and irrespective of anything else has to be a good thing.

“Replacing this by a policy of “public money for public goods”, principally environmental improvement, is also to be welcomed.

Speed of change

“However, the speed of change is very slow, not being completed until 2028.

“A lot can happen in politics in a week, so a 10-year implementation period raises some concerns about what will actually be delivered.”

Ian Ashbridge, farm business consultant at Bidwells, said the phased elimination of direct payments could not be guaranteed until the UK had agreed its departure from the EU.

The Agriculture Bill failed to articulate a comprehensive food and farming policy and left farmers and landowners no clearer about how they would be supported, he said.

Mr Ashbridge said: “The announcement is short on detail and will leave farmers unclear as to what is being asked of them in the future.”

But Jeremy Moody, secretary of the Central Association of Agricultural Valuers, said farmers should plan for Basic Payment Scheme (BPS) payments to be phased out.

Clear time frame

“We have been given a clear time frame for the complete removal of BPS for English farmers. BPS is to be phased out from 2021 to 2027 and then it will be gone.

“That gives a time window in which farmers and their advisers should review their businesses, consider how best to handle the likely erosion of margins, and deliver the necessary changes.”

The Agriculture Bill states that the agricultural transition period for phasing out direct payments in England is seven years starting in 2021.

This means the final direct payment received by farmers would be in 2027, with no direct payments at all from 2028 onwards.

However, the Bill also reserves the right for the government to extend the transition period should it deem that dong so is necessary.

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