Farming organisations welcome the long awaited consultation on "golden handshake" lump sum exit scheme

The long-awaited consultation on Basic Payment Scheme changes, including the lump sum exit scheme and administration of direct payments, has been broadly welcomed by farming organisations.

The CLA has welcomed the consultation but warned putting it in place must not be delayed.
The CLA has welcomed the consultation but warned putting it in place must not be delayed.

The Government consultation will be open for 12 weeks, closing on August 11, and Environment Secretary George Eustice said it would help address two “challenges”.

“We need to address the twin challenges of helping new entrants fulfil their dream and gain access to land, while also helping an older generation retire with dignity,” Mr Eustice said.

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“Our exit scheme will offer farmers who want to exit the industry all of the area payments they would likely have received until the end of the transition period in a single lump sum. It gives them a real incentive to confront what can often be a difficult decision and will help them clear bills and settle debts.

“By renting out their farm or surrendering their tenancy, those exiting the industry will create important opportunities for the next generation of farmers.”

But, while welcoming the consultation, CLA president Mark Bridgeman warned there must not be delays in putting it in place.

“We welcome the launch of this consultation and it does give much-needed information on the exit scheme,” Mr Bridgeman said.

“But there are still many questions to be answered. The scheme will not be for everyone, but if it is to contribute to industry restructuring and create opportunities for new entrants and those wishing to expand, there are some critical issues to be addressed – including clarity on tax treatment of lump sums payments, and the eligibility and exit conditions.

“The biggest challenge is the timing, and there can be no further delays in launching the scheme later this year.”

George Dunn, CEO of the Tenant Farmer Association (TFA), said that, while the lump sum scheme was never going to provide the complete solution for those looking to retire, it could help as part of a package.

“As part of a portfolio, which might include a surrender payment from a landlord for a secure tenancy, sale of livestock and equipment and other pension provision, it could be a very useful catalyst,” he said.

“However, we will need to await the detailed rules before being able to fully advise our members.”

NFU vice president Tom Bradshaw said the union wanted to see a domestic agricultural policy which allows farm businesses to thrive.

“We want to see a fair transition which allows farmers who are considering leaving the industry to have sufficient time and information to make those significant decisions.

“As our agricultural support is overhauled, farm businesses across the country will be making life-changing decisions about the future of their farm or tenancy. We must recognise the personal nature of this decision and how no two farm businesses are the same, meaning each set of circumstances for a farmer considering a lump sum exit payment will be truly unique.”

He also referenced the political row over trade deal negotiations with Australia and the importance of getting it right to protect UK farmers.

“While getting the framework of future agricultural policy schemes right is important, Defra’s policy transition must not ignore the consequences of the Government’s new trade deals as these will be absolutely critical to the viability of many family farms,” Mr Bradshaw warned.