Livestock upland farmers in Yorkshire face huge cut in profit

Experts are warning the highest BPS claimants will be hardest hit as the maximum claim will now be £7,200.

It has been announced Defra will apply a 76 per cent reduction to the first £30,000 or less of a BPS payment, and a 100 per cent reduction to anything above this.

Defra has stated the overall support budget for England will be protected, with £2.4bn available for the coming financial year, along with a further £200m of unspent funds rolled over from previous years.

Some £1.8bn of this is being targeted at the three Environmental Land Management (ELM) schemes – some £500m more than in the current financial year.

Farming minister Daniel Zeichner said: “ELM schemes will remain at the centre of our offer for farmers and nature, with the Sustainable Farming Incentive, Countryside Stewardship Higher Tier and Landscape Recovery all continuing.”

For 2025, the top four per cent of recipients will receive no more than £8,000, but for most farms £7,200 will be the highest value direct payment they will receive next year.

Now called delinked payments, the 2023 scheme year was the last year of BPS.

Based on each farming business’s average of the 2020-22 BPS payment, the delinked payments started in 2024, and will progressively reduce over 2025/26, ending completely in 2027.

Knight Frank has compared average profit and loss figures from the farm business survey 2022 and has updated the figures to show the replacement delinked payment income in 2025.

Simon Britton, head of agri-consultancy at Knight Frank, said LFA farms would be harder hit due to their historically higher proportion of income from BPS in comparison to other farm types.

This would result in them losing 45 per cent of their bottom-line profit with the new subsidy reduction plans, he warned.

"Cereal farmers can expect a 24 per cent drop in profit, lowland livestock farms 26 per cent, and mixed farms 34 per cent.

“Clearly, to ensure these farming businesses remain sustainable and future-proof, there should be an urgency to fill the gaps in income."

The government announced that the rapid reduction in direct payments was a means to open up funding for schemes that have increased environmental or sustainability attachments.

However, Defra said the Countryside Stewardship Higher Tier scheme would only offer extensions or mirror agreements, some of which date back to 2005, leaving businesses with limited opportunities to enter new schemes.

Mr Britton said: “There needs to be more clarity on how farming businesses, especially those in the uplands, are expected to survive if the drop in BPS and the roll-out of new schemes are not aligned.”