Mind the BPS Funding Gap

The recent Government announcement guaranteeing this year’s BPS was accompanied by the disclosure that from 2021, BPS will start to be reduced and come to an end in 2028. At the same time the Government announced plans to reduce BPS in 2021, with the introduction of a banded reduction depending on the level of payment.

The actual reduction at farm level will depend on the size of the claim as illustrated by Table 2.

Beyond 2021 the reductions are not clear but with the New Environmental Land Management Scheme (NELMS) not expected to become fully functioning until 2025, the majority of farms are likely to be substantially worse off from 2021 onwards. See Table 3.

The current Countryside Stewardship Payment is based on the principle of income foregone. It will be difficult to see how most farms will be able to compensate for the loss of the BPS income. Carefully targeting of higher paying Countryside Stewardship options onto the least productive areas of the farm is obvious but for anyone in a current agreement this option does not exist.

Contact William at w.waterfield@fcgagric.com or your local FCG office, to discuss how the changing Subsidy Schemes proposed will affect your business.

Posted in Andover, Business Management, Environment, Grant Funding.