Sustainable Farming Incentives – What’s available to help your farm go green?

Since the UK left the European Union, a number of new agricultural policies have been introduced to support farmers. In this blog, Frank Smith & Co Solicitors Agricultural team will look to explain the different systems in place to support farmers transition to a greener way to operate. 

Reaction to leaving the EU 

Following Brexit, the UK had to replace the Common Agricultural Policy (CAP) which, in 2018, provided UK farmers with £3.5 Billion per year in payments.  This payment system was based on the acreage farmed and controlled environmental regulation with the threat of financial penalties for non-compliance.   

The Agricultural Act 2020 set out the new post-Brexit framework for new schemes to reward UK farmers based on ‘public good’. DEFRA published an updated plan, The Path to Sustainable Farming: An Agricultural transition plan 2021-2024 introducing schemes to increase biodiversity, restore landscapes, promote animal health and increased productivity through capital grants.  

At the core of these schemes is the Environmental Land Management Scheme (ELMS) which has 3 core programmes.  

  • Sustainable Farm Incentives (SFI) 
  • Local Natural Recovery Programme 
  • Landscape Recovery Scheme.   

Early comments from the farming community showed these schemes provided positive change but concerns were shown that they made little reference to supporting food production. The adoption of this scheme was slow largely due to the lack of clarity on the details, concern of future changes to the programme and the uncertainty this produced. Some farmers publicly expressed that small payments weren’t sufficient to warrant taking land out of production and if the government weren’t careful, they’d unintentionally promote intensive farming to maximise profit per acre - noting the CLA state that C.25% of farms are understood to be profitable without the farming supporting under CAP.  

New SFI schemes 

On June 21st the Government released new details of the wider, but simplified SFI schemes. The Farming minister Mark Spencer said this was in response to extensive feedback from farmers to simplify and streamline the SFI scheme.  

To be eligible for the payments you must have been a single farm payment eligible farmer on either 16th May 2022 or 15th May 2023 and check that your land is up to date on the Rural payment agency services portal. It is made clear that you still need to comply with any regulatory legislative requirements outside of these agreements.  

The 3,300 farmers who adopted the SFI 2022 scheme will shortly be served notice and asked to join the 2023 scheme. New schemes presently last 3 years and there is flexibility to move the activities between fields if the HA size proposed in the plan remains the same. If farmers want to introduce new activities, they can apply to update their agreements towards the end of the first and second year of the 3-year agreements.  

One step forward is that farmers will be paid every 3 months designed to help cash flow.  

Expansion of the scheme includes nearly double the amount of ‘actions’ available to farmers; a management fee of £20 / HA to cover costs up to 50 HA running this scheme; a payment for a one-off farm visit to review livestock annually; and the payment is now open to both upland and lowland farmers.  

How to apply 

The incentives are managed centrally on an online based system which will only show farmers actions that their farm is eligible for and apply without the need to employ land agents incurring additional costs. The simplified system allows farmers to choose their own actions in a less prescriptive format. It is unclear what this means practically for farmers without computers or those with limited internet infrastructure. Interestingly, the government announced a £7 million fund on June 21st that will test out new methods to boost rural connectivity using satellites.   

The government have also ensured there is no minimum or maximum land area or hedge length that a farm must include in a scheme and these activity payments can be used in conjunction with existing Countryside Stewardship and Environmental Stewardship schemes. More detail is needed on how it works with other schemes like carbon credit creation and water company schemes. ‘Stacking’ of payments, receiving funding across multiple schemes for the same work, is what farmers are calling for to make it viable. Presently, the government confirm you cannot be paid twice for the same work.  

For tenant farmers, the commitment lengths have been shortened to remove the need for Landlord consent. Tenant farmers should be advised that to ensure the activity doesn’t require express permission in their tenancy agreements.  

Payments include:  

  • £10/100m for managing one side of hedgerow 
  • £129/HA for multispecies crop. 
  • £989 a year for integrated pest management plans 
  • A yearly vet visit to inspect livestock.  
  • £55HA for companion cropping. 

The government have confirmed that to get paid for your SFI agreement, you must:  

  • Complete the SFI actions you’ve chosen for each 12-month period from the start date of your SFI agreement (the ‘agreement year’)  
  • Submit an annual declaration to confirm you’ve complied with the mandatory scheme requirements under your SFI agreement for the relevant agreement year. 
  • Supply evidence specified in section 4 (eligibility of land for an SFI agreement), section 5 (about your SFI agreement and payments) and the SFI actions (section 2)  

If the land is sold or there is a new tenant, the land is regarded as no longer being in the farmers ‘management control’ and any SFI activities on that land must be removed from the agreement. You must inform the agency within 8 weeks of this activity. Some or all the money paid for this activity will have to be repaid if you’ve not completed the actions and submitted your annual declaration that year. There will be no additional financial penalties like other previous schemes.  

The New SFI scheme booklet will be published shortly. Applications are open from August 2023 where landowners will see a controlled roll out of the support scheme. 

While the jury is still out on whether the new policies will provide real benefit to UK farmers, the intention is clear, make farming in the UK greener and sustainable. Government should have clear lines of communication with farming representatives and have an ear to the ground ready to provide any support the industry may need. 

For more information and support on these and other farm incentive schemes, contact Frank Smith & Co Solicitors. 

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