In what may be a timely recognition that the balance between food production and environmental improvement is perhaps more complex than it initially appears, another change to the Sustainable Farm Incentive (SFI) scheme was announced on 25 March.
One of the criticisms which has been levied against the scheme is that the payment rates are sufficiently generous to encourage those on mediocre land to take the land out of production, effectively opting for a secure low cost income scheme rather than incurring input costs and risks in the hope that the market value of the food produced will exceed the costs of growing it.
This equation has now been at least partly addressed. In future, there will be a cap on the proportion of land which can be put into some of the SFI options – specifically no more than 25% of the holding can be put into any combination of:
- Flower-rich grass margins
- Pollen and nectar flower mix
- Winter bird food on arable and horticultural land
- Grassy field corners and blocks
- Improved grassland field corners or blocks out of management
- Winter bird food on improved grassland
No doubt there will be some who oppose the change whilst others will feel it does not go far enough – and it certainly doesn’t address the point that the potential food production lost will vary across the industry according to the nature of the soil and the production foregone – although perhaps that will be a commercial decision which will be driven by the markets. Certainly, this latest announcement is an attempt to return to the broad principles of the scheme, or in the words of the minister: “The six actions we are capping were always intended to be implemented on smaller areas of land, and these changes will help to maintain this intention and continue our commitment to maintain domestic food production.”
The press release also mentioned in passing that some 15,000 farms had now applied for a SFI scheme. This elaborated on the figures given by the Prime Minister at the NFU conference, which implied that 11,000 farms were actually within SFI and that “almost half” of English farms had entered a post-Brexit scheme. 19,000 have accessed the free business advice offered in the Farm Resilience Scheme.
Turning these figures around, they become less impressive. There are over 90,000 farms within the old BPS regime, so we can equally deduce that only about one in six has signed up to SFI, less than a quarter have taken up the offer of free advice (probably worth several hundred pounds) and more than half have not gone into any post-Brexit scheme.
The reasons for the lack of take up are no doubt manifold, probably including the relatively high level of commodity prices in the last few years and also the slow and inconsistent development of the SFI scheme (now on its third version in three years). Nonetheless, given that the level of BPS payment has now halved and will disappear altogether in three years, the lack of engagement with the new schemes does give cause for concern.
*The views expressed are the author’s and not ICAEW’s