BUSINESS CLINIC Farmers need to act now to prepare their businesses for the ending of direct payments and assess how they can mitigate the impact of these changes through other avenues. Cedric Porter takes a look at the advice farmers can access now to help with this.
Producers urged to sign up to free business advice
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ritish dairy farmers along with their colleagues in other sectors are facing some of the biggest changes to their businesses in more than 50 years as the government embarks on a post-Brexit policy which sees the ending of direct payments. To help farmers navigate the changes, Defra has launched the Future Farming Resilience Fund, which gives farmers free support and advice. There are 19 companies and organisations across England which have been commissioned to deliver one-to-one advice sessions as well as webinars and in-person events. Farming Minister Victoria Prentis says: “As we continue
There is likely to be a whole range of actions farms can take to mitigate the impact ROSE JACKSON to co-design and develop the future schemes, it is important the industry has access to expert support and knowledge. “So I urge farmers and land managers to sign up to the Future Farming Resilience Fund.”
Reduction in direct English farm payments from 2021 Payment band Up to £30,000 £30,000-£50,000 £50,000-£150,000 More than £150,000
2021 5% 10% 20% 25%
2022 20% 25% 35% 40%
2023 35% 40% 50% 55%
2024 50% 55% 65% 70%
Value of payments 2020 £5,000 £10,000 £20,000 £40,000 £80,000 £160,000
2021 £4,750 £9,500 £19,000 £37,500 £70,500 £134,000
2022 £4,000 £8,000 £16,000 £31,500 £58,500 £110,000
2023 £3,250 £6,500 £13,000 £25,500 £46,500 £86,000
2024 £2,500 £5,000 £10,000 £19,500 £34,500 £62,000
Many of the organisations taking part are offering on-farm visits from specialist consultants who will assess the business and then write a report, including benchmarking against other businesses and an impact assessment of the changes in support. Kite Consulting is one of the 19 organisations offering support. Senior dairy consultant Rose Jackson says: “Dairy farmers will start to see reduced farm payments from this year, with an average farm losing about 1.7ppl by 2028 when direct payments will have disappeared altogether. This will
inevitably influence the bottom line and understanding that impact now
Supports tail off from this year JFrom this year, English direct farm payments are due to be reduced, with final payments being made in 2027. Defra has announced the proposed annual reduction from 2021 to 2024. So a farm which received £40,000 in farm support in 2020 will see that reduce by 55% to £19,500 by 2024. Large payment will reduce proportionally faster than others. So a farm receiving £5,000 in payments will see a halving of support to £2,500 by 2024, but one receiving £160,000 will see a 70% reduction over the four years to £62,000.
The precise year-by-year scale of reductions from 2025 to 2028 has not yet been published. Defra plans to offer farmers lump sum payments from 2022 where recipients can take the total value of their remaining payments (2022 to 2027) in one go allowing them to invest in the business or retire. Those taking this option will receive no payments after they have been paid the lump sum. From 2024, Defra plans to delink payments removing the need to farm the land associated with the support to receive the funding.
Source: Defra
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NOVEMBER 2021 15/10/2021 10:00
