We have all heard the slogan “Public funds for public goods” but what is the financial and operational reality behind it?
After much back and forth, with reviews and elimination of some schemes, it seems the dust is beginning to settle and we are seeing more clarity as time goes on, however the full picture is still being painted, causing many farms to understandably delay making a move until the full options become apparent so as not to waste time and money, fearing the goal posts moving or a more attractive scheme emerging.
What we can be certain of is that the governments focus is on incentivising farms to restore habitats, increase biodiversity and improve the health of their soils, which in turn will help the government to deliver on its legally binding environmental targets to reduce greenhouse gas emission by at least 100% of 1990 levels, by 2050.
With Agricultures potential to sequester huge amounts of carbon in its soil, it isn’t hard to understand the thinking behind the government’s direction and focus on Agriculture to achieve this. It should be noted that from a Farms perspective, providing these public goods, improving soils, sequestering carbon and improving biodiversity, is not necessarily mutually exclusive from an economic benefit to farm businesses. With the volatility of input costs, many farmers are already actively improving their soils through reduced soil disturbance and incorporating Countryside stewardship into their rotations, fixing nitrogen and phosphates into the soil.
As we enter January 2023, where do we currently stand? We know that the government has committed to maintain the farming budget for England at £2.4 Billion per year throughout this parliament. Up until 2020 the majority of this was through BPS, as the BPS is phased out each year up until 2028, the money is gradually becoming available to farmers through the following means:
One off grants for equipment and technology
On-going payments for environmental actions (ELMS & CS+)
Funded support and advice from agricultural bodies
ON/OFF GRANTS
FARMING EQUIPMENT FUND: The first round in 2022 has closed and was a fully funded grant to purchase specific pieces of equipment. The grant ranged from £2,000-£25,000 and covered various agricultural enterprises with equipment ranging from Cattle handling systems, Rainwater harvesting tanks, Direct drills to Crop storage sensors. The second round is anticipated in 2023 and well worth looking into for equipment that can make your operation more efficient, save you time or help you adapt your farming system. You can still take advantage of the second round if you participated in the first round.
FARMING TRANSFORMATION FUND: These grants are for larger pieces of infrastructure ranging from £25,000 – £500,000. Grants that have now closed include Improving farm productivity grant, water management grant and adding value grant. At the time of writing the only grant open for applications is the Slurry Infrastructure grant which is between £25,000-£250,000 to replace, build or expand existing slurry stores to provide six months storage. Grant contributions are based on the m3 and the type of storage. It is competitive, with priority given to farms that will provide the most environmental benefits from having increased slurry storage. Again, well worth looking into to increase your storage capacity, update your infrastructure and bring more flexibility into your slurry applications. Applications will be closing on 31st January 2023.
ON-GOING PAYMENTS - EMVIRONMENTAL LAND MANAGEMENT SCHEMES
SUSTAINABLE FARMING INCENTIVE: The SFI payments are focussed on improving soils, with ongoing funding available for horticultural and arable soils, improved grassland soils and moorland soils, as well as payment for yearly veterinary visits for livestock farmers.
The ongoing payment rates have been described by some as a “gentle start”, with payments ranging from £22-£40 for Arable and Horticultural soils and £28-£58 for improved Grassland soils.
Many farmers have expressed that the eligibility requirements and administration costs for the scheme are not worth it for the returns. With the introductory payments for arable and Horticultural soils at less than 10% of the BPS payments per Ha, it’s understandable why many have come to this conclusion. Fortunately, it seems that farming minister Mark Spencer has taken note of this, and it has recently been announced that up to an extra £1000 will be made available to help smaller farm businesses cover the administrative costs of taking part. An additional £20/ha will be provided for the first 50 hectares entered the scheme. For a 250-hectare arable farm entering the introductory level, total payments would be £6,500 and £11,000 for the intermediate standard. It’s worth mentioning that many farms have found that they are already conducting the soil organic matter testing required and have soil management plans in place for red tractor farm assurance scheme that can make them eligible for SFI.
Further details can be found here:
LOCAL NATURE RECOVERY COUNTRYSIDE STEWARDSHIP: Throughout 2022 we have been waiting for details of the Local Nature Recovery scheme to be finalised. The scheme intended to make payments to farmers to manage, restore and create various habitats, to provide feeding, shelter and breeding areas for wildlife on arable farms.
After a review it was decided that the intentions of this scheme will now be delivered through an enhanced Countryside Stewardship scheme. This is positive news, over 30,000 farms are already involved with countryside stewardship and are used to the application process and the principles of the scheme, making participation in the countryside stewardship more manageable as we await further details to unfold.
It was also announced on 5th January by Defra that current Countryside Stewardship payments will be increasing by an average of 10% with capital grants for one off projects such as hedgerow creating, increasing by an average of 48%.
FUNDED SUPPORT AND ADVICE
To help farmers to understand and make the most of the funding and grants that will be replacing the BPS, Defra has set aside funding in the form of the Future Farming Resilience Fund helping 17 trusted agricultural and environmental bodies to provide tools, support and advice directly to farmers to adapt to these changes and remain resilient throughout the phasing out of the BPS.
NIAB have joined forces with Farm business consultants AKC Agric and Savills to really broaden the type of advice that can be offered to farm businesses. NIAB’s FFRF support and advice comes in the form of a thorough farmbusiness report, workshops with specialists from the three organisations covering topics such as soil health, optimising new funding, succession/tax planning, farming system change and a one-to-one specialist follow up to focus on a particular topic specific to your farm and business context. The one-to-one follow up could be with an agronomist, soil scientist, tax specialist or farm business consultant. It is up to you to set the agenda and is a great opportunity to get direct access to some of the best knowledge in the industry and spend time with, and pick the brains of, experts that you might not ordinarily have visiting your farm.
IN SUMMARY
Whilst details of the enhanced countryside stewardship are yet to be ironed out, things are moving in the right direction, schemes are getting more detailed, and the payments are increasing. The government are listening to and adapting to farmer concerns. My advice would mirror Mark Spencer’s thoughts and encourage farmers to get involved with the SFI’s at this introductory stage, make the most of the grants as they come available and get involved with the FFRF to stay up to date with the latest changes and access to the latest research and information.
I will leave you with some of the words of our farming minister, Mark Spencer, speaking at the Oxford Farming Conference on Thursday 5th January
"My challenge to our great industry is simple - this year, take another look at the Environmental Land Management schemes and think about what options and grants will help support your farm.
“As custodians of more than 70% of our countryside, the nation is relying on its farmers to protect our landscapes as well as produce the high-quality food we are known for, and we are increasing payment rates to ensure farmers are not out of pocket for doing the right thing by the environment.
“By increasing the investment in these schemes, I want farmers to see this stack up for business – whatever the size of your holding.”
Wishing you all the best for 2023
Greg Crawford
Farm Business Resilience Consultant