With the government due to announce more detail on ELMS next month, H&H Land & Estates looks at what is known so far and what is anticipated.
The government has signalled its intention to replace both the Basic Payment (BPS) and Countryside Stewardship (CS) schemes with an Environmental Land Management Scheme (ELMS).
Scheduled for launch in late 2024/early 2025, ELMS is being developed under the principle of paying farmers and land managers “public money for public goods.”
This is to deliver goods such as clean water and air, biodiversity and habitat management, landscapes, adaptation to climate change and flood mitigation.
David Morley, Head of Conservation & Environment at H&H Land & Estates, said that although firm detail was sketchy, Defra had indicated the structure of this three-tier scheme.
Tier 1 will involve basic environmental measures in support of sustainable farming, such as nutrient management, good soil husbandry, reducing ammonia emissions and efficient use of water, Mr Morley said.
And it may also include basic land management, such as management of field margins and cover crops.
"Tier 1 could consist of either a set 'standard' that all farmers would have to meet or a menu of options that farmers could choose from," he said.
"The latest suggestion is that it could be a simple annual contract, rather than on ongoing agreement.
"Defra recently announced the Sustainable Farming Incentive (SFI), expected to be launched before ELMS. It will include a similar range of measures and it is anticipated it will in due course become Tier 1 of ELMS.
"The government has realised that, to deliver significant benefits, there must be a high level of participation.
"However, whether this can be achieved in practice will depend on there being enough suitable options for farmers to choose from and the payments being sufficiently attractive."
Tier 2 will involve land management options and capital funding designed to deliver a wide range of environmental benefits, Mr Morley said.
These might include various habitat management options, tree and hedge planting, options to mitigate flooding, restoring dry stone walls, permissive access and educational visits.
Agreements are likely to be offered over 3, 5 or 10 years, depending on the management options involved.
"This Tier is similar to the current CS Scheme, although hopefully with more options to reflect the different public goods ELMS aims to deliver," he said.
"The CS scheme is perceived as being somewhat biased in favour of arable farmers, with very few viable options available to upland farmers in particular.
"I believe this needs to change under ELMS, especially as it is in the uplands where, arguably, public goods of greatest value are delivered.
"To encourage participation, Tier 2 needs to offer significantly better payments than Tier 1, and must be more attractive than CS if farmers are going to be able to make up the shortfall from the loss of BPS.
"The suggestion is that payments might comprise a basic amount for following the requirement management prescription with a top-up for delivering exceptional results – an outcome-based approach.
"'Payment by results' is appealing, in that farmers will be appropriately paid for the quality of their conservation work rather than just following a set of rules.
"However, this needs to be balanced against factors out-with their control, such as weather and unpredictability of plants and wildlife.
"Ultimately, it is hoped that payment rates will be driven by the value of the public goods being delivered, difficult though these are to calculate, rather than the 'income foregone' calculations of the CS scheme."
Lastly, Tier 3 is reserved for projects that deliver landscape-scale environmental change, such as planting new woodlands, restoring areas of peatland and creating new areas of wetland.
Likely to require a collaborative approach, Defra is proposing to support this financially through the Scheme, Mr Morley explained.
Payments are likely to be individually negotiated and there has been a suggestion that groups of land managers might bid for funding in a “reverse auction”.
"The government is also looking into the possibility of supplementing funding for the Scheme with private finance," he said. "Aiming to deliver significant environmental improvements, ELMS could be an exciting development.
"However, until we know what payments will be on offer and what farmers will have to do to receive them, it is impossible to know if ELMS will be a success or a missed opportunity."