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DEFRA confirms £3 billion of agricultural support for 2020

Wed 8 January 2020

The Chancellor, Sajid Javid has confirmed nearly £3 billion of funding for farmers in 2020; remaining at 2019 levels and giving confidence and support to the industry before the UK leaves the EU. The announcement allows UK farmers to plan for their future in an industry without financial support as they know it.

UK farmers have been facing the possibility of a business without subsidy since BREXIT was announced in 2016 as when we leave the EU, we will no longer be part of the Common Agricultural Policy (CAP) Direct Payment scheme; a subsidy mechanism that financially supports farmers across the EU. Shockingly, DEFRA reported that Basic Payment Scheme (arguably the pinnacle of all CAP Direct Payments) accounted for 61% of the average annual farm profit, of £37,000, from 2014 to 2017.

Commenting on the announcement, Charles Raine, Director at youngsRPS said: “The announcement is a welcome relief to farmers across the nation who have faced uncertainty and, without doubt, worry, over how the industry will be supported in a post BREXIT environment. Of course, this does not mean that careful business planning and subsidy analysis is no longer of importance; this simply gives the industry much needed security for the next 12 months as well as time to plan for the future in, what is to be, a new era of farming.”

The UK government has plans to replace BPS, in which payments are calculated on the amount of land under management, with a new Environmental Land Management Scheme (ELMS), concentrating on:

  • Rewarding public goods with public money
  • Achieving a thriving self-reliant farming system
  • Achieving a trusting and productive relationship between the Government and farming
  • World class animal welfare standards

Charles continued: “Whilst the proposals for the new scheme remain unclear, we urge farmers to take the 2020 funding announcement as a window of opportunity. A new scheme will bring the biggest shake up to the farming community in many decades, and only those that have thought strategically and truly understand their business, both operationally and financially, will be able to take full advantage of future funding.”

For more infomation about strategic farm management and future proofing your business, please get in touch with Charles Raine on 01434 609000.