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Significant changes to come for the Basic Payment Scheme

Following the introduction of the Agriculture Bill into Parliament on January 16th 2020, the new policy will be aimed at boosting productivity and rewarding environmental improvements. Elements of the Agriculture Bill focus on Direct Payments, Agri-environment agreements and the future approach under the Environmental Land Management Scheme (ELMS).

 

It has been confirmed that the Basic Payment Scheme for 2020 will remain largely unchanged with direct payment being phased out over the next 7 years.  This transition period will give farmers time to adjust to a new scheme with 2027 being the final year in which any form of direct “delinked” payment will be made.  The Government also has the power to modify the legislation governing the Basic Payment Scheme.  Amendments to the Basic Payment Scheme are only allowed for five specific purposes including simplifying the administration of the scheme or removing provisions which are no longer practical.  The simplification of the Basic Payment Scheme could also see greening payments cease before the end of the transition period.  This allows for the removal of the current requirements for crop diversification and the three crop rule.  The power to do this can only occur if 30% of the overall budget currently allocated to greening remains available to recipients providing the remaining Basic Payment Scheme requirements are met. In practice, this would mean you still receive the greening payment without the need to comply with crop diversification assuming all other Basic Payment rules are met. 

 

As many will be aware, the Bill provides the power for the continuation of the Basic Payment Scheme beyond 2020 until its replaced with “delinked” payment or until direct payments are completely phased out. Delinked payments could replace Basic Payment Scheme as early as 2022.  The Bill also allows for direct payments to be phased out from 2021-2027. It is important to note that once payments are delinked, the Basic Payment Scheme will terminate.   A delinked payment means that direct payment will be delinked from the land. Therefore, the recipient would no longer be required to farm the land in order to receive the payment during the transition period. The Secretary of State must define who is entitled to a delinked payment in which there will be qualifying criteria and also a method to calculate the value of delinked payments. Eligible recipients will be able to opt out of receiving the payment.

 

The power to provide a lump sum payment in lieu of “relevant payments” may also be available in the future. An “eligible person” may choose to take a lump sum instead of receiving relevant payment during the transition period.  The eligible person would have to apply for it, be in receipt of a direct or delinked payment and meets any other eligibility criteria to be stipulated in regulations. At the moment it is unknown what this criteria may be.

 

It is clear that there is going to be significant changes to the Basic Payment Scheme over the coming years. Should you have any questions regarding your 2020 Basic Payment Scheme please contact our office on 01677 425950 to speak to a member of the team.