Lump Sum Exit Scheme – Consultation Period Open - Today sees Hannah Maynard welcome the opening of the consultation period on the new Agricultural Policy
Today we welcome the long-awaited opening of the consultation period, launched by Defra, which will discuss the transition of BPS payments to the new Agricultural Policy. The new proposals aim to offer a fairer and simpler alternative to BPS payments, though how payments will be calculated is still to be decided.
Commenting on this new phase of the project, Hannah Maynard, a Rural Surveyor at H&H Land & Estates, said:
“As part of the transition into new Agricultural Policy, Defra have set out proposals to offer established farmers who wish to exit the industry a one-off lump sum payment of up to £100,000 in place of any further direct payments. It is anticipated the calculation will be based on a payment worth 2.35 times the amount of the average of the previous three years BPS claims, from 2018-20. The farm business that claims the BPS will then be required to surrender their entitlements and will be unable to claim for any further direct payments. If the farming business is a partnership or limited company, all partners or directors would have to leave the industry.
“Owner occupier farmers would be required to then either sell or rent out their land on a Farm Business Tenancy of at least 5 years. Tenants would be required to surrender their tenancy. However, allowances may be made for retaining the farmhouse and up to 5% of the agricultural land, subject to a maximum of 5 ha. The exit payment will only be available to those who claimed BPS in 2015 or before, to prevent recent agricultural entrants benefiting from the scheme. The lump sum will be offered in the early half of 2022, and interested parties are advised to look into the scheme early, as Defra advise they will not be offering this incentive in later years of the agricultural transition period.
“The aim of the scheme is to allow those wishing to retire or leave the industry early to do so in a planned and orderly way and consequently open up wider opportunities for the next generation, and existing farmers wishing to expand and improve their current enterprises. The scheme will run alongside other additional support for new entrants into the industry with the overall intention to introduce fresh ideas, innovation and boost productivity in the agricultural sector. Like BPS, there are no conditions imposed on what the exit money can be spent on and the payment could be used together with other funds, such as the proceeds from the sale of business assets to purchase an alternative property, if required.”
Defra have now opened the 12-week consultation period (ending on 11 August 2021) on exit payments, including delinking, and are seeking the views from those exiting or entering the industry, along with those with business interests in agriculture, on how the lump sum should be calculated and who should be eligible.
A detailed report of the responses collected is due to be published later in 2021. Details on how to participate in the consultation can be found on the Defra website or for more information please contact H&H Land & Estates.
Having built up an enviable track record of securing grant funding on behalf of farming clients over the years, H&H Land & Estates have eagerly awaited today’s announcement.