The Government has proposed to phase out current direct support payments for farmers - which are the difference between profit and loss for many farm businesses - between 2021 and 2028.
Under the existing Basic Payment Scheme model, farmers are paid on the basis of land size but Ministers want to pay farmers instead for the delivery of “public goods”. However, those public goods have yet to be formally defined and no detail has been announced about how new payments will be structured.
Nigel Pulling, chief executive of the Yorkshire Agricultural Society, said: “A major area is about the change to the Basic Payment Scheme and the move to more of an environmental focus. There's no detail behind this and over the last few years this has been a fundamental part of farm incomes.
"Farming is a long-term business so the Government needs to give the industry clarity and that's why we are backing this initiative."
Dorothy Fairburn, northern director of the Country Land and Business Association, added: “Profitable farming can go hand in hand with delivering public goods such as enhancing the environment but only through long-term business planning that must be backed by the certainty of multi-annual investment by Government, which should include direct investment in skills and productivity.”
In the absence of clear policy detail, business management adviser Chris Clark, of Nethergill Farm in the Yorkshire Dales, said: “Until the Government gives farms the clarity that every business requires, every farm should budget for a significant reduction in direct payments and anticipate the effect that it might have.”
One of Grow Yorkshire’s aims, with government support, is to provide business advice to farms and Mr Clark said this was badly needed as part of a cultural shift within British agriculture.
“Over the years, few farmers have managed, or more importantly, have not been encouraged to manage, proper budgeting,” he said.
“Farms that make an “accounting profit” only do so after significant subsidies and, or, the financial support of a spouse’s income or other non-farming related revenue.”