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Public money for public goods

As the Agriculture Bill enters its final stages, we anticipate further detail later this month setting out what the next few years will entail.

Written by Matthew Sawdon

Currently applications for Countryside Stewardship will remain open until 2023. After which it is mooted that a Sustainable Farming Incentive (SFI) may be introduced to bridge the gap between the end of the Basic Payment Scheme and the start of the new Environmental Land Management Scheme (ELMS).

It is anticipated that the SFI will in due course become Tier 1 of ELMS. For smaller farms the SFI could bring some short-term relief.

The ELMS scheme, scheduled for launch from 2024, is being developed under the principle of paying farmers and land managers “public money for public goods”.

Although detail is lacking, DEFRA has indicated the structure of a three-tier scheme as follows:

• Tier 1 – basic environmental measures in support of sustainable farming.
Examples include: nutrient management, good soil husbandry, efficient use of water, management of field margins and cover crops. It may be either a set “standard”, or a menu of options to choose from. The latest suggestion is that it could be a simple annual contract, rather than on ongoing agreement.

To deliver significant benefits, there must be a high level of participation. Whether this can be achieved in practice will depend on delivering enough suitable options for farmers to choose from and the payments being sufficiently attractive.

• Tier 2 – to involve land management options and capital funding designed to deliver a wide range of environmental benefits through a management plan for the farm; developed between the farmer and an accredited advisor using a menu of options and payment rates.

These might include various habitat management options, tree and hedge planting, options to mitigate flooding, permissive access and educational visits. Agreements are likely to be offered over 3, 5 or 10 years.

This Tier appears to be similar to the current Countryside Stewardship (CS) Scheme.

The suggestion is that payments might comprise a basic amount for following the management options, with a topup based on the concept of “payment by results”.

Farmers will be appropriately paid for the quality of their conservation work rather than just following a set of rules.

However, this needs to be balanced against factors outside of their control, such as the weather.

• Tier 3 – reserved for projects that deliver landscape-scale environmental change, such as planting new woodlands, restoring areas of peatland and creating new areas of wetland.

Payments are likely to be individually negotiated and there has been a suggestion that groups of land managers might bid for funding in a “reverse auction”.

The Government is also looking into the possibility of supplementing funding for the Scheme with private finance.

ELMS is potentially an exciting development; whether this is an effective and sustainable land management tool will only become clear when further details are released.

Please call our team to keep up to date with the latest announcements.

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