‘Haphazard’ shift to post-Brexit payments scheme could put farmers out of business, MPs say

“Insufficient care” in changes to how farmers receive subsidies has led to a “haphazard” transition process, risking livelihoods, MPs have warned.

After Brexit, the government is replacing the EU’s agricultural subsidies with a new payment system designed to help farmers while also boosting biodiversity, protecting soils and improving access to land.

While the old EU system largely paid farmers based on the area of land they farmed, there are concerns the new system, known as the Environmental Land Management (ELM) scheme, could inadvertently put greater pressures on farmers to extract money from their land – possibly through increased use of unsustainable practices.

The Environmental, Food and Rural Affairs (Efra) Committee warned the government’s handling of the transition means farmers are now left with considerable uncertainty about how the seven-year transition to the new system would affect their businesses.

The committee said the government department responsible for implementing the process – Defra – has put “insufficient emphasis and care” into managing the transition, risking a “haphazard” process with unintended consequences.

The report criticised the government’s communication with farmers, saying Defra must “develop a clear engagement strategy which connects with the full range of farmers and land managers, or its plans will risk falling at the first hurdle.”

As well as there having been delays in communicating the new policy to farmers, the committee also highlighted particular challenges the system presents to those farming the uplands.

“Defra must avoid ‘squandering’ the potential of uplands, tenant farms and common land to deliver public goods such as carbon capture and storage,” the report said.

The new ELM payment scheme won’t work if they follow the same path as previous incentives, the committee said – where payments for improving the environment were based on the agricultural income the farmer could otherwise have made – and they said the new payments must fairly and fully represent the costs of delivering green action.

Defra must publish an impact assessment detailing the consequences of the transition for different agricultural sectors and regions, develop a clear engagement strategy with farmers, and publish precise and measurable objectives for ELM.

The committee also urged the government to retain the current budget for agricultural payments until at least 2029.

Neil Parish, chairman of the Efra select committee, said: “This is the most fundamental change to agricultural funding in a generation, and the impact of this huge change on farmers’ incomes and entire ways of life cannot be underestimated.

“The plan to support farmers through this transition must be robust, and it must be able to adapt to unforeseen circumstances.”

He accused the government of being determined to plough ahead with phasing out the old payments without considering how it would affect farmers’ livelihoods and the environment.

“It is essential that the government undertake the necessary work to understand exactly what the consequences of this transition will be.”

He added: “These schemes will only be successful if uptake is high- and this can only happen if land managers are clear on how ELM will work for them.

“It is essential that Defra engage effectively with the full range of land managers and farmers to communicate its plans, and that it funds peer-to-peer learning, which will build the confidence needed for the English farming sector to fully embrace the change.”

A Defra spokesperson said: “Our future agricultural policy will move away from the arbitrary land subsidies and top-down bureaucracy that epitomised the EU era and incentivise farmers to farm more sustainably, create space for nature and enhance animal welfare outcomes. We are supporting the choices that farmers make for their own holdings.

“Since January, in England, we have increased the money going to Countryside Stewardship, we have consulted on an exit scheme and we will be setting out plans to support new entrants.”

Additional reporting by PA.