The government has launched a consultation into the administration of direct payments and a lump sum exit payment for farmers who may be looking to leave the industry. Charlotte Cunningham reports.

The consultation will be open for 12 weeks and focuses on two key areas:

  • Lump sum exit scheme – Building on evidence that some farmers would like to retire or leave the industry but have found it difficult to do so for financial reasons, the Government proposes to offer them a lump sum payment to help them do this in a planned and managed way. The consultation seeks views on who should be eligible for these lump sum payments and how the payments should be calculated.
  • Delinked payments – Direct Payments currently made through the Basic Payments Scheme offer poor value for money and are based on how much land a farmer has, which inflates rent and can stand in the way of new entrants. The Government plans to phase Direct Payments out over a gradual seven year transition period, to move to a fairer system. The consultation includes plans to separate the payment from the amount of land farmed, from 2024. This will simplify the process for farmers, allow them to focus on running their business and encourage them to take up the government’s new environmental land management schemes, which will reward sustainable food production and environmental improvements. The consultation seeks views on how the ‘delinked’ payments will be calculated.

“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,” said environment secretary, George Eustice.

“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 and later this year we will be saying more about our plans to work with County Farm estates and other land owners to ensure that we nurture the right conditions for new enterprises to flourish.”

Fair transition

Responding to the launch of the consultation, NFU vice president Tom Bradshaw said:

“The NFU wants to see a domestic agricultural policy that allows farm businesses to thrive, rewarding them for both the safe, traceable and affordable food they produce for the nation and their extensive work caring for the countryside.

“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 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.

“We must also 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. We will now be consulting with our members extensively to understand their views on these proposals.

“Of course, any discussion around people exiting the industry must be coupled with how we attract new people into agriculture. It’s crucial that the schemes announced today work in a coherent way with schemes such as the New Entrant Scheme and Future Farm Resilience Fund to ensure British farming has a thriving workforce for generations to come.

“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. Trade and policy must act in tandem.”