Beef and sheep farm incomes could be significantly hit if producers are not accepted on to the new Countryside Stewardship Scheme (CSS), say farm business consultants Andersons.
The CSS replaces ELS and HLS from 1 January 2016 but will be awarded on a competitive or invitation-only basis, with the funding pot reduced. This means there will be no automatic enrolment for farms already entered into the old agri-environment schemes and fewer farmers will be able to access this funding.
Richard King, head of research of Andersons, said there was concern that beef and sheep producers, who were on average most reliant on CAP support, could lose a substantial part of their farm business income if they were not accepted on to the scheme.
SPS and agri-environment schemes made up about half of the farm business income on the average grazing livestock farm in 2013-14, according to Defra figures.
Producers currently entered into ELS and HLS could lose about 25-30% of their overall CAP payments if they were not accepted on to the new CSS, said Mr King.
About 70% of England is covered by an agri-environment scheme, but this could reduce to as little at 30-40% under CSS, according to estimates from Andersons.
With the removal of the entry-level scheme, funding would be more difficult to access and be given to farmers who offered the biggest environmental benefits, said Mr King.
Applications would be judged according to local priorities, so farmers should understand the focus of their Local Enterprise Partnership and Leader group before applying, advised Mr King.
The potential loss of funding will add to the pressure on farm business incomes, which are forecast to fall or remain the same in 2015, mainly due to lower prices for key outputs.
A strengthening pound and shift of BPS payments from the lowlands to the uplands is likely to further reduce support payments.