All the latest announcements that you should be aware of.
There has been quite a volume of information flowing out of DEFRA recently. In part this is because every minor guidance revision is re-released to those who subscribe to their emails, so it is not unusual to receive 60-70 emails, each advising that a document has been reissued ‘to include an updated dataset’.
More importantly, we have seen a number of announcements regarding the Sustainable Farm Incentive (SFI), both in its pilot form and also regarding the 2022 early entry initiative. The pilot project was not particularly well received, with about 2,000 businesses expressing an interest and slightly under 1,000 joining in the trial (although given that those already in stewardship schemes could not join the SFI pilot, a low level of participation is not surprising). The ink was barely dry on the application forms (or their virtual equivalent) before a number of pricing improvements were announced, increasing the payments for some elements by between £2 and £5 per hectare. This was followed in February by the opening of capital grant applications for pilot farmers. The grants are being administered as part of the stewardship package but contain specific elements for SFI pilots, split into three categories (water, air and boundaries) and capped at £20,000 for each category.
Switching to the early entry 2022 SFI scheme, it was announced on 2 December that all farms would be allowed into some aspects of SFI from 2022. Only the parts of the scheme relating to soil management have been opened up and, obviously, parcels such as buffer strips which are already within stewardship schemes will not be double funded. However, the rates of support range from £22-£58/Ha, paid quarterly in arrears (and presumably to increase in line with the pilot scheme changes when the rules are finalised). Only the introductory and intermediate standards are available in 2022 but it is intended that the advanced standard will be introduced for 2023 onwards.
Clearly these payments will not be a substitute for the BPS payments which had been running at about £230/Ha, but this was never the intention. The amounts now announced are the first element of the basic scheme, designed to be taken up by most farming businesses. In fact, the nearest parallel is the Entry Level Scheme which was the predecessor of BPS, and which was, indeed, a widely adopted, broad, shallow scheme.
The conditions for SFI 2022 are remarkably straightforward, requiring little more than soil testing and assessment, overwintered green cover (including autumn sown crops) and some adding of organic matter. It is likely that many farms will already be doing this, so for them the main commitment will be going online to compete the form in the spring. This point has been recognised and criticised by some environmental groups but the negative comments miss the point. The 2022 SFI scheme is not the end of the journey towards subsidy change but rather the very first step into a new regime which gives public money for public goods and is aimed to attract 70% of businesses by the time it is complete in 2028. Full details are available here.
The rates for mainstream stewardship schemes have also been amended, the amendments to take effect from 2023. Each category of activity has been reviewed and most (but not all) have been increased substantially. For example, the popular AB1 nectar flower mix will rise by 13% from £511/Ha to £579 but AB12 supplementary winter feeding only goes from £632 to £657 (4%) and AB14, harvested low input cereal drops by £30 (9%) for 2023 agreements. GS2 low input grassland rises by a significant 39% from £95 to £132/Ha. More information can be found here.
We have also recently been reminded that the window for new stewardship schemes opened on 8 February and closes on 29 July for mid-tier and wildlife offers or 29 April for higher tier agreements. In an earlier release, it was confirmed that the Countryside Stewardship Scheme will remain in place until 2023, with the final round of new CSS schemes running from January 2024. The existing combination of higher tier, mid-tier, wildlife and capital funding programmes will continue.
Further announcements on the higher levels of ELMS were announced in January, for introduction in 2023 and 2024, by which stage the existing Countryside Stewardship Scheme (CSS) will be withdrawn to new entrants. For the time being, however, those who ignored the pilot project because of existing stewardship schemes should set aside some time in the spring to identify land free of double funding which could be entered into SFI. £40/Ha is clearly not as good as BPS but it is still considerably better than nothing, and in terms of pounds per hour of work, completing an application form is likely to be among the better ways of spending time this spring.
By now, almost everyone involved in the farming industry will be aware that the Basic Payment Scheme (BPS) is being phased out, and indeed at the beginning of December that fact will have been underlined by the receipt of a BPS payment which was appreciably smaller than that received in 2020. A recent reminder confirmed that although the 2022 stewardship and BPS claim forms are not yet available, businesses are advised to check maps and lodge RLE1 forms as soon as possible so that claims can be made in good time when the portals open.
There is undoubtedly much going on at the moment, with more to follow later this year. It will be interesting to see how well the payments are labelled when they start to arrive, and each will need to be tested against the conditions to ensure compliance with FRS 102. It is to be hoped that the audit trail with support the process.
*The views expressed are the author's and not ICAEW's.