UK government sets out bigger post-Brexit subsidies for farmers

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The government will offer farmers in England bigger subsidies to grow produce sustainably in a bid to drive take-up of its flagship post-Brexit agricultural policy, as businesses in the sector struggle with high costs and low returns.

Environment secretary Steve Barclay on Thursday announced a 10 per cent average increase in the value of payment agreements across two subsidies that form part of the Environmental Land Management schemes.

The environment department said 8,000 farmers had last year applied to one of the new regime’s subsidies, the Sustainable Farming Incentive, far below the 82,000 eligible.

As well as boosting the value of the SFI and Countryside Stewardship subsidies, the government will streamline the application process and introduce premiums for actions that do the most to protect the environment.

The changes follow sustained low enrolment by farmers in ELMs, which apply only to England and are designed to replace the payments provided under the EU’s Common Agricultural Policy.

The EU-era payment scheme is now being phased out, with farmers receiving lower payments annually from 2021 through to 2027.

Farmers and industry groups have widely criticised the implementation of ELMs, citing their slow rollout, complicated application processes and how they incentivise farmers to take land out of food production at a time of heightened concerns around domestic food security.

Ahead of a speech to the Oxford Farming Conference, Barclay said the government had “listened to farmers’ feedback and set out the biggest upgrades to our farming schemes since leaving the EU, with more money, more choice and more trust to support domestic food production whilst also protecting the environment”.

Over the past few years, farmers have been hit by record production costs, ranging from feed to energy and labour. But what they are paid has not risen at the same pace, with retailers trying to keep food prices low to help inflation-squeezed households.

In a report based on interviews with 40 farmers, the OFC found that the sector was subsidising cheap food, and that farmers were routinely being paid below the cost of production. This prevented them from reinvesting in and expanding their businesses, the report said.

“The costs of production for fruit and [vegetable] growing has increased by between 20 per cent and 27 per cent depending on the enterprise. That’s simply unsustainable,” said Ali Capper, OFC chair and executive chair of trade group British Apples and Pears.

Steve Reed, shadow environment secretary, said that if Labour won the election expected this year, it would “cut through the Tory bureaucracy that has blocked farmers from receiving funding”.

The main opposition party would also ensure the public sector bought more locally produced food and “tear down export barriers” with the EU, he said. 

The National Farmers’ Union welcomed the changes set out by Barclay, but said the government remained “a long way behind on its commitments” to the sector.

It added that the planned phaseout of payments to 2027 was “very concerning” and that farmers needed more detail on how they could transition from existing agreements to the new offers.

NFU vice-president David Exwood said an “urgent assessment . . . of the agricultural transition on food production and farm business viability” was “an absolute must”.

Martin Lines, chief executive of the Nature Friendly Farming Network, an industry group, said the government’s offer maintained “the commitment to pay farmers public money for public goods which the market currently does not reward”.

But he cautioned that there was more work to do to achieve an agricultural transition that delivered positive outcomes for farmers. 

The government also pledged to consult on making food labelling clearer to help shoppers understand where produce came from and whether it met UK welfare standards.

“British consumers want to buy this top-quality food, but too often products produced to lower standards overseas aren’t clearly labelled to differentiate them,” said Barclay.