Days numbered for 'decoupled payments' in England after Budget

Details of the ongoing phasing out of direct payments to farmers in England have been revealed by Defra following this week’s Budget, with all recipients having 76% of their basic amount cut by 2025.

This is comparable to the 50% reduction in so-called decoupled payments (formerly money from the Basic Payment Scheme) that applied in 2024, and amounts to a significant acceleration of the demise of the old support scheme.

For farmers receiving up to £30,000, 76% will be cut, but anything above that will be cut completely.

This way, a farmer who originally received more than £100,000 in the Basic Payment Scheme (BPS) will receive no more than £8,000 in 2025.

“We are accelerating the end of the era of payouts to large and wealthy landowners just for owning land, with reductions in payment margins applied on a sliding scale,” a statement from Defra said.

Protected

But Defra insists the overall support budget for England is protected, with £2.4 billion available for the 2025-2026 period, plus a further £200 million of unspent funds carried over from previous years.

Of this, £1.8 billion will go to the three Environmental Land Management (ELM) programs – around £500 million more than in the current financial year.

“ELM programs will continue to be central to our offering for farmers and nature, with the Sustainable Farming Incentive, Countryside Stewardship Higher Tier and Landscape Recovery all continuing,” said Defra agriculture minister Daniel Zeichner.

Budget freeze

But despite claiming this is the “largest budget ever to target sustainable food production”, the Country Land and Business Association (CLA) has condemned what it sees as a budget freeze.

CLA president Victoria Vyvyan said: “The decision to keep the budget at the same level since 2014 – a cut in real terms – will impact farmers, consumers and the environment who are struggling.

“It will damage confidence and stability across the sector, putting farmers’ profitability at risk. It could affect sustainable food production and undermine improvements to wildlife habitats, flood management and access to nature.”

Representatives of Scottish landowners are also concerned.

“The Chancellor has ignored the findings of the Bew Review, allowing funding for agricultural support to be locked into a separate block grant since 2021,” said Sarah-Jane Laing, CEO of Scottish Land and Estates.

“Instead, agricultural funding will be linked to the Barnett Formula, which will mean a significant reduction in overall agricultural funding, with little sign from the Scottish Government that they will be able to make up the difference.”

Agricultural recovery fund

There was better news regarding the Farming Recovery Fund.

The previous Conservative government had allocated around £50 million to help farmers restore their land after last winter’s storms.

Only £2.1 million has been paid out so far, raising fears that Labor will fail to deliver on the promise.

But Mr Zeichner has now confirmed the money will be spent “soon” and has increased the amount to £60 million.