This morning Defra released its policy paper on the future of agricultural support in England, The Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024. The paper gives an overview of how the government plan to achieve their 2028 twin aims of:

• “a renewed agricultural sector, producing healthy food for consumption at home and abroad, where farms can be profitable and economically sustainable without subsidy” and
• “farming and the countryside contributing significantly to environmental goals including addressing climate change”.

We are pleased to see environmental improvement so clearly identified as a policy driver for the new Environmental Land Management scheme (ELMs). Now we need to see this translated into an ambitious scheme which balances the split of available funding between its components to ensure meaningful environmental delivery.

As the end of the Brexit transition looms, in just 32 days, farmers will be both pleased and frustrated to see this paper. The paper reiterates the plan to phase out direct payments under the old European Common Agricultural Policy, over seven years, and use the money released to invest in the new ELM scheme and productivity grants. However, details on ELMs are not yet set. They will continue to develop as learning points are taken from the results of the 68 current tests and trials, and the national pilot starting towards the end of next year. More on the national pilot including expressions of interest, and on the government’s response to discussion submissions, is expected in the new year.

The Scheme

For now, we know that the new Environmental Land Management scheme will be made up of three components, previously referred to as tiers.

• The Sustainable Farming Incentive, addressed in Al’s recent blog, will be open to all farmers to support basic sustainable husbandry
• Local Nature Recovery will be a habitat and flood focused scheme to replace Countryside Stewardship, and
• Landscape Recovery will help deliver against some of the government’s more ambitious targets such as creation of the Nature Recovery Network.

We are strongly supportive of direct payments being replaced by a public money for public goods approach to ensure delivery of environmental benefit and will be following the development of ELMs closely.

Currently there is a risk that the universally accessible Sustainable Farming Incentive (SFI) could lack ambition, looking too much like the current system under the cloak of a new name. Increased levels of participation compared to current agri-environment schemes is important, but only in so far as it provides benefits. We want to work with Defra and other stakeholders to make sure the opportunity for widespread environmental improvement through SFI is realised.

The timing

Direct payments reductions are being implemented from 2021, with bigger reductions being made to higher payment bands. The details for this can be seen in Annex D of the transition plan. By 2024 it’s expected that direct payment levels will have been halved. These reductions free up the funding to invest in ELMs.

ELMs timing:

• Towards the end of 2021 the national pilot is expected to be launched with around 5,500 participants.
• In 2022 some elements of the Sustainable Farming Incentive are expected to be rolled out. (Details of this scheme, including payment rates, are expected by June 2021.)
• Then from late 2024 all three element of ELMs are expected to be operational.

Defra recognise that in the early years of the transition, when direct payments have been cut but ELMs has not been fully launched, many farmers will face financial difficulties. To help ease this they are introducing a farming resilience programme for the first three years of the transition. This includes a Farming Investment Fund which will open for applications next year.

We welcome the creation of a farming resilience programme to help address potential impacts created by the transitions funding gap. We’re keenly aware that farmers who are experiencing financial stress are far less likely to prioritise environmental delivery and that without business support an environmental deficit could emerge. It’s clearly important to avoid an environmental deficit both for nature’s sake and because we know that repair is far more costly than avoidance.

CAP timing:

The reduction in direct payments under the Basic Payment Scheme is being accompanied by several other changes including the removal of greening requirements for 2021 (which weren’t seen to be effective in delivering environmental benefit), a change in approach to provide more advice to assist enforcement of cross compliance requirements, and an improved Countryside Stewardship scheme which will be open for new applications until 2023.

The regulation

Earlier this month the Agriculture Bill was passed, becoming an Act on the 11^th November after a long ping pong period between the House of Commons and the House of Lords. The Act paves the way for the new Environmental Land Management scheme by allowing payments for environmental benefits under clause 1.

Changes to the existing schemes will be facilitated through a statutory instrument which is to be laid shortly.

In future the success of ELMs, and measurement of that success, will be reliant on there being a strong regulatory baseline from which to measure additional delivery. We look forward to the government’s consultation, in the ‘early transition’, on a new regulatory regime to achieve this. We also welcome the promised efforts to make existing rules work better from 2021 until the new regime is established, including the new slurry investment scheme to provide grants for slurry stores and equipment.

The undecided

As the co-design process continues and learning from the tests and trials and national pilot is acted on, we’ll be looking out for details on:

• What land management actions are chosen for each component scheme (expected 2021) and how this is balanced with an approach which puts more focus on outcomes
• What metrics are being developed for monitoring benefits
• Payment levels (expected 2021), and
• How ELMs can sit alongside private funding opportunities (for which Defra is currently working on a policy proposition).

The decisions made in these areas have the ability to dramatically impact the potential of ELMs to provide for the environment.

For now, the question I want to leave you with is how far can our collective ambition take us in realising the potential of this opportunity to redesign our agricultural support scheme? CIWEM will be engaging with Defra and with other stakeholders to play our role in the realisation of a scheme that delivers for the environment.

You can access Defra’s full policy paper, The Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024, here, and the accompanying press statement here. All of our previous consultations submissions including those made to Defra on the development of ELMs can be accessed here.

Sarah Anderton - Policy Adviser, CIWEM

30/11/2020.