Further information announced on delinked payments in 2025

The Budget was announced on 30^th October 2024. AHDB published a response to the budget yesterday. Following this, Defra have released more details on what this means for farmers and further information on delinked payments in 2025.

Delinked payments replaced direct payments in 2024, as they are no longer linked to the amount of land a farmer has. Direct payments began reducing over successive years from 2021, and have continued reducing as part of delinked payments.

The reductions to payments payments were confirmed up to 2025 and farmers have been waiting to see what the reductions will look like in subsequent years until payments are completely phased out in 2027.

Defra confirmed that payments will be reduced in 2025 and have provided details on what these reductions are.

Reductions are based on the payment received in 2020. For the first £30,000 received, there will be a reduction of 76%. For any payments above £30,000, the money received above £30,000 will be reduced by 100%.

For example:

• If the amount received from direct payments in 2020 was £50,000:
  • 76% reduction applied to the first £30,000 – a reduction of £22,800
  • 100% reduction applied to the remaining £20,000
  • Payments would be reduced to £7,200 for 2025

Defra say that this reduction in delinked payments will increase the pot of money for environmental land management schemes, and therefore enable more farmers to access funding from these schemes.

With payments reducing further it is important to consider options to improve productivity and access different funding pots. We have done analysis of the Sustainable Farming Incentive (SFI) scheme looking at stacking different SFI actions and how this can impact the bottom line of farm businesses. We have also done analysis of the characteristics of top performing farms which can provide insights for farmers who are looking to improve their own financial performance.