7-year phase out of direct payments

Yesterday (12 September) Defra released an Agriculture Bill setting out the framework for the future Domestic Agriculture Policy. Much of the bill is procedural, providing the Secretary of State and the devolved administrations in Wales and Northern Ireland with the powers to carry on current EU rules, with the flexibility of changing them later on. However, there were some notable indications of future changes.

From 2021, direct payments (for farmers in England and Wales) will be phased out over a 7-year transition period, with those receiving larger payments seeing reduction at a quicker rate. However, during this transition direct payments will also become separate from the requirement to farm the land. As a result, payments may be paid in a single lump sum of several years’ worth allowing farmers to; invest in their farming enterprise, diversify or even retire from farming.

While direct payments will go, there is no suggestion, at present, to say this money will move to other industries. The focus is being shifted to the environment and farmers will be paid for ‘public goods’ which will include; boosting air/water quality, boosting wildlife and tackling climate change. However, details of how this will work are not available yet.

What is clear is the need to prepare for the changes ahead. AHDB has various tools and analysis that can aid the planning process of the loss of direct payments and different Brexit scenarios.