The Department for Environment, Food and Rural Affairs (Defra) is phasing out land-based subsidies, which were part of the EU’s Common Agricultural Policy, and is planning to provide financial support through three new schemes, which are part of the Environmental Land Management (ELM) programme.
The Government says the sustainable farming incentive, local nature recovery and landscape recovery schemes will “reward environmental land management” when they are rolled out in 2024, following a series of tests and trials.
But the Government’s spending watchdog, the National Audit Office, has found that important elements of the ELM are “not yet in place”, there is no detailed delivery plan past March 2022 and farmers do not know what activities they are expected to undertake, how many employees they will need to do the work and how much funding they will receive.
David Blacker, who runs an arable farm near York, said: “We know the general direction it’s heading in, but we don’t know any of the standard details that we need to make our business decisions.
“I appreciate, it’s going to take a bit of time to change a system like this, it’s been in place for the last 40 years, but it is a concern that we can’t plan going forward for the long term.
“I’ve got no idea what implications this is going to have on my business in three, four or five years’ time.”
He said the Government’s decision to phase out direct payments over seven years is “sensible” but if a new support scheme is not in place by 2027 “a lot of farmers will go out of business”.
English farmers received around £2.4bn under the EU’s system and 38 per cent of those farmers would have made a loss between 2017 and 2020 without direct payments.
Defra is due to fully roll out the replacement ELM programme by 2024, but the National Audit Office said farms “lack trust” in the department because of “a long history of difficulties with its management of past agricultural subsidy schemes”.
The sustainable farming incentive is being piloted with 1,000 farmers from October, with plans to launch some core elements of the incentive in mid-2022.
Defra expected at least 5,000 eligible farmers to take part in the pilot, but only 2,178 have expressed an interest.
Lucinda Douglas, director of CLA North, said: “There needs to be a scheme which gives clarity to farmers who will from this year start to see the financial impact of the reductions in the basic payment scheme.
“If this is not in place for rollout, they should consider delaying it.
“They’re expecting farmers to essentially gamble with the future viability of their business.
“We know there's going to be a reduction in payment rates, we know that's happening. But what we don't know is what the future will look like and that's what farmers need, just like any other business. Every business wants to be able to provide long-term stability."
Environment secretary George Eustice said: “Our future agricultural policy will move away from the arbitrary land subsidies and top down bureaucracy that epitomised the EU era. We will incentivise sustainable farming practices and reward farmers for the environmental assets on their land.
“The National Audit Office recognises that we have made good progress but we will be addressing some areas where there have been misunderstandings in our full response to the report.”