The average family farm in England will see subsidy cuts of over 50% by 2024 before new post-Brexit schemes are fully available, Defra has confirmed.
The government has today (30 November) launched its 'path to sustainable farming' roadmap, changes which will be brought in over a period of seven years.
The Environmental Land Management scheme (ELMS) will be introduced to incentivise sustainable farming practices while boosting the environment.
But the rate at which EU direct support reductions will take place has left farming industry groups with significant questions and concern.
The ELMS will consist of three components. The Sustainable Farming Incentive will support approaches to farm husbandry that deliver for the environment, such as actions to improve soil health and integrated pest management.
The Local Nature Recovery will pay for actions such as creating, managing or restoring habitats, natural flood management and species management.
The third component, the Landscape Recovery, will focus on landscape and ecosystem recovery through projects looking to achieve large-scale woodland creation, peatland restoration, or coastal restoration.
A new Farming Investment Fund is also set to open for applications next year, providing support to businesses so that they can invest in equipment, technology and infrastructure.
It will include two levels. The Farming Equipment Technology Fund will offer small grants toward the purchase of a list of specified items, and the Farming Transformation Fund will provide larger sums towards more substantial investments.
The new system announced today represents the most significant change to farming and land management in England in 70 years.
But farming groups have reacted with concern over cuts to direct payments, which will be reduced starting from the 2021 Basic Payment Scheme (BPS) year.
Businesses who receive £30,000 or less per year will see their subsidy fall by 5% in 2021, followed by a gradual increase to 50% by 2024.
Farmers currently receiving between £30,000 to £50,000 a year in BPS payments are on course to face reductions even higher than that. Those who receive up to £150,000 will see cuts of 65%.
Defra will also consult formally on a proposal to offer lump sum exit payments to farmers who may wish to leave the sector and plans to delink direct payments from 2024.
The NFU says the payments have been a 'lifeline for many farmers', particularly when prices or growing conditions have been volatile.
NFU President Minette Batters said: “Take livestock farmers for example, who we project will have lost between 60% and 80% of their income by 2024 as a result of these reductions.
"What changes will Defra make to ensure that the new Environmental Land Management schemes offer rewards that provide a genuine income for their businesses while maintaining food production?
“Expecting farmers to run viable, high-cost farm businesses, continue to produce food and increase their environmental delivery, while phasing out existing support and without a complete replacement scheme for almost three years is high risk and a very big ask.
“These are the questions Defra needs to answer urgently, for every farming sector and every part of the country."
The Country Land and Business Association (CLA), which represents 30,000 rural businesses, said while the new system had the potential to be 'genuinely world-leading', the transition away from the EU was 'fraught with risk'.
Mark Bridgeman, CLA president said: "Many farmers will find it hard to see past the drastic cuts to the Basic Payment Scheme, that begin next year.
"The government has announced the Sustainable Farming Incentive to help bridge the gap, but with only a month to go before the transition phase begins we have no details whatsoever about how this will work on the ground and the level of investment it will provide.
“This lack of detail risks casting a shadow over government’s laudable aims.”
But Defra Secretary George Eustice said the UK's new system was a move away from the 'prescriptive, top down rules of the EU era'.
“We want farmers to access public money to help their businesses become more productive and sustainable, whilst taking steps to improve the environment and animal welfare, and deliver climate change outcomes on the land they manage.
"If we work together to get this right, then a decade from now the rest of the world will want to follow our lead,” he said.
Defra says the roadmap will be followed by a period of engagement with farmers and land managers to finalise the design and operation of the future system.
For example, the final design for the future ELMS will continue to evolve and adapt through co-design exercises, such as on-farm tests and trials.
It comes a few weeks after the Agriculture Bill passed into law, providing the powers for England to move away from the current EU system.
Further detail on the new schemes announced today are due to be published early next year.
What are the key changes?
Key changes farmers and land managers in England will see include:
• The Environmental Land Management scheme, consisting of three components, will incentivise sustainable farming practices
• More investments in improving animal health and welfare as part of Defra's sustainable farming approach
• Direct Payments will be reduced starting from the 2021 Basic Payment Scheme year
• A Farming Investment Fund, which will launch next year, will see farmers supported for innovation and productivity
• Simplifying existing schemes and their application processes, such as cutting red tape, from January 2021