Friday, 18 June 2021
With BPS applications fresh in our minds, AHDB's Steve Dunkley talks about why it is a stark reminder to farmers and growers in England that change is upon us and what action people can take.
The first reductions in direct payments in England will be applied this year. Come December’s payment window, the initial five per cent might not appear too great a loss, especially in those sectors currently buoyed by high prices. Those who lose a higher percentage might begin to feel the pinch, as the rate varies depending on how much you have received historically.
But for most the reduction will be 50 per cent by 2024, just three years away – that is by the time you calve down this year’s heifer calve as replacements or by halfway through your next crop rotation. Though Government is developing options to reward environmental land management, our analysis shows these payments will not cover the loss of BPS.
Now is the time to take action to mitigate the loss and preserve farm businesses’ legacy. Taking a wait and see approach isn’t an option, reviewing the business and seeing what needs to be done to secure its future for you and the family and exploring options to replace the reduction in income should be prioritised in 2021.
To do this speak with your family, advisers and to other farmers in your local area or pick up the phone to us here at AHDB.
We have an online tool to help farmers visualise the reduction, as a means of starting meaningful conversations about what the reductions in BPS means for your business with our Business Impact Calculator.
We contacted several farmers and growers to talk them through using the calculator and found it really brought home the reality of losing direct payments, galvanising them to start planning now.
Tom Mead from Cambridgeshire said it was "simple-to-use" and "an important first step prior to planning budget on existing ventures or evaluating fresh opportunities" with his family and farming team. Steven Lawson from Northumberland said it meant he could "plan ahead and look for any changes that are needed early on" to minimise the impact on his business.
I'd urge you to follow suit and give it a try. We have a network of Knowledge Exchange Managers around the UK to help guide farmers and growers to this and other tools, products and services they can access to start shaping up their businesses to be fit for the future.