From 2024, we understand that subsidy payments made on land in England will be “delinked” and will not be reflective of the amount of land claimed upon. DEFRA have now released more information on how this will work in practise.
Delinking will take effect from 2024, meaning the BPS application made in 2023, is the last application window where entitlements will have a purpose, thereafter, the remaining payment may even be renamed. Therefore, from 2024 onwards, the payments will essentially be “run off” payments to cushion farmers to manage change in the remaining years of the Agricultural Transition Plan (to 2027). The value of the delinked payments will be assessed on the basis of past payments made in a reference period from 2020 to 2022. Claimants will be told their reference amount prior to the first delinked payments are made.
The right to receive the delinked payments is dependent on making a valid BPS application in 2023, the scale of the claim is not important, just that a valid claim is made.
The below table identifies how much BPS will be reduced until 2024, with no announcements yet for the reductions for 2025, 2026 and 2027.
| BPS Reductions until 2024 | ||||
| Payment Band | 2021 | 2022 | 2023 | 2024 |
| Up to £30,000 | 5% | 20% | 35% | 50% |
| £30,000 – £50,000 | 10% | 25% | 40% | 55% |
| £50,000 – £150,000 | 20% | 35% | 50% | 65% |
| £150,000 + | 25% | 40% | 55% | 70% |
DEFRA is moving away from the Cross Compliance Scheme and has advised that no cross compliance penalties would be applied to delinked payments where the recipient continues to farm. Instead of Cross Compliance DEFRA will be moving towards an intended regulatory base line for farming activities.
Entitlements will have a negligible value after the last occasion on which they could be used 15th May 2023, therefore, giving rise to a capital gains loss. This is what occurred at the end of milk quota and livestock premium rights.
For further information see link: https://www.gov.uk/government/publications/lump-sum-payments-for-farmers-who-leave-or-retire-from-farming-and-delinked-payments
Should you wish to discuss the future of farming schemes in England, and how your business might change to cope following the reduction in subsidy-based support, please do not hesitate to contact Ellie Watkins on 07495 006808 or ellie.watkins@ruraladvisor.co.uk