A change of direction?

The thrust of the Government’s approach to money for agriculture is to persuade farmers to take money for “farming” the environment rather than carrying out the operations that we all normally associate with agriculture.  The Single Farm Payment Entitlements will be subject to a compulsory European modulation – which we all know means an increasingly progressive deduction of 3% from direct payments in 2005 to 5% from 2007 onwards.

Over and above this, the UK secured agreement to enable an additional national modulation rate to be levied – a further deduction.  The Government will make use of this flexibility to modulate at a higher level than the compulsory EU rate.  The additional national rate will be 2.0% in 2005 (a total of 5.0%) and 6.0% in 2006 (a total of 10% when added to the European figure of 4.0% for that year).  In England, this will be used to fund agri-environment spending as part of the Government’s sustainable farming and food strategy, and in particular the introduction of the new agri-environment scheme, entry level stewardship (“ELS”). Some may wonder what approach our EU partners have taken on national modulation: In April of last year DEFRA stated “…no Member State other than the UK intends to use the additional national modulation provisions beyond 2005”.

The ELS (open to all farmers) is aimed at “simple yet effective environmental management”, and will be administered by the Rural Development Service.

Since this money is being “taken away” from farmers, how can they get it back?  Simply by making an application to join the ELS.  By October of this year some 700,000 hectares had been registered under the ELS (of which, 8,000 were in the organic ELS).

The scheme is administered on a points tariff per area (buffer strips and the like) by length (hedgerows and the like) or number (in field tree planting) and each applicant is given a points target for the land entered into the scheme.  Subject to meeting that target, farmers receive £30.00 per hectare paid six monthly, in arrears.

An applicant under ELS has to have “management control” for the whole five years of his agreement under the scheme.  Where this is not the case the application needs to be countersigned by the landlord or another person having management responsibility, thereby confirming that the agreement will be complied with for the whole of the five year period.  If this cannot be achieved and the agreement is later broken, grant aid may have to be repaid.

Where control is in the hands of a group of people (such as a partnership) an application can be made on behalf of the group by a nominated person, but all will be responsible for compliance with the terms of the agreement.

Double claiming will not be allowed, so that land included in the Countryside Stewardship Scheme will not benefit from an ELS payment too.  Interestingly, and in line with a recent shift in Government policy, land in the Energy Crops Scheme can be entered into the ELS.  It is also worth noting that criteria of “good farming practice” will apply to all the farm, even if parts of it are not within the ELS scheme.

In fact, most farmers will already have a substantial number of points to draw on through the normal farming operations and management practices that they are already carrying out.  As such, there may be little extra required to bring in extra income to the farm.

In the present climate, where farm incomes seem to be continually under external pressure in respect of prices for goods produced (and the increasing costs of bringing supplies onto the farm) any sensible farming review must take into account, and very serious consideration given to the possibility of using the ELS as an extra source of revenue.

Jan 2006