The ability for farmers to claim subsidy payment as a lump sum could help promote on-farm investment to drive productivity and profitability.
The Government has proposed plans to allow delinking and consolidation of Basic Payment Scheme (BPS) payments into a lump sum as part of the transition to a new agricultural policy in England and Wales after the UK leaves the EU.
Delinking breaks the link between the land and the subsidy payment, meaning people would continue to receive payments regardless of production levels, land area or if they decide to stop farming altogether.
Instead, how much an individual receives would depend on a reference period, and the payments would taper to zero at a fixed end point.
The Government says this would allow "greater flexibility" during the Brexit transition phase, which should help farmers adjust to the removal of Direct Payments.
The option to apply for a delinked or lump sum payment was one of the Defra proposals in its ‘Health and Harmony’ consultation document and for which provisions have now been published in the Agriculture Bill going through Parliament
It will allow farmers to make land use decisions on economic and business grounds rather than driven by the requirements of the support regime.
'Housing solution'
Another major advantage of a lump sum payment would be to assist with retirement and restructuring, according to the Tenant Farmers' Association (TFA).
TFA Farm Policy Adviser, Lynette Steel said: “For tenant farmers, particularly those on older, secure tenancies, a lump sum payment could unlock the possibility of a housing solution for future retirement or, coupled with a payment for a tenancy surrender, provide a more immediate move into retirement allowing their holding to be farmed either by a new entrant or another farmer looking to progress their business.”
With only a few details available for how delinking and lump sum payments would operate, the TFA has produced a short paper to provide some suggestions on how the arrangements could work in practice.
The paper is an attempt to put some flesh on the bones of the initial idea. It looks at rules of eligibility, payment mechanisms, the impact on the future use of farmland previously used to be matched with entitlements and how the success of the scheme should be evaluated.
The TFA will be using the paper as part of our ongoing discussions with Defra and the Welsh Government.
