For a scheme that is largely undeveloped, there is plenty of discussion that ELMS is going to revolutionise agriculture as we move forward. There seems to be a general feeling that farmers will soon be turning their backs on production and turning their farms into wildlife sanctuaries. The Basic Payment Scheme will begin to be phased out in 2021 and will be removed entirely within seven years. So what should a farming business be looking at to maximise their position?
ELMS – The future?
The Environmental Land Management Scheme is scheduled for national release around 2024, so whilst it is currently very topical, farmers and land managers won’t be changing their practices for a year or two yet. That said, we do have some basic knowledge of what to expect with ELMS.
Firstly, the scheme will be based on the premise of ‘Public Money for Public Goods’, which broadly translates to being, ‘UK government backed payments to support land management that provides wider public benefit’. Examples of these types of the land management and the public benefit could include: the management of water to prevent flood risk, soil management to capture carbon or planting to enhance landscape and biodiversity, to name but a few ideas.
ELMS will also be based on a tiered system, similar to the schemes of the past, with a basic first tier which will be farm based and has been referred to as the sustainable farming incentive. The idea is a lower level payment for lower level changes, for instance sensitive hedgerow management or alternative soil cultivations. Based on the information we have seen to date, I would expect this to look similar to Entry Level Stewardship that we previously knew.
The second tier is designed as a collaboration between local farmers, which will see a focus on local public goods which could not be achieved by one holding alone, for example with a joined up approach to water management to prevent a local flood risk issue or linked up planting for biodiversity corridors.
Finally, the highest third tier agreements will work at a landscape scale; these will handle the largest and most complex situations. Peatland restoration is often cited as an example, but I envisage this being similar to the Higher Level Stewardship agreements over common land and coasts that we currently see.
The here and now
ELMS is no doubt the direction of travel, but it is some way off and there is plenty of missing detail. So is it worth taking another look at the options currently open? Well firstly, the UK government have now provided assurance that anyone with a live stewardship agreement will not be unfairly disadvantaged; most have interpreted this to mean these agreements can be terminated early and ELMS could be signed up.
In my opinion, whether you are an intensive dairy business or environmental freedom fighter, Countryside Stewardship (CSS) is worth a look at the very least. In the past couple of years, GTH have secured several million pounds worth of agreements for a full range of clients across the south west.
There will more than likely be a few changes to CSS over the next few years as the scheme continues to adapt, but CSS currently offers annual payments for land management, as well as capital grants towards farm improvements. Of course the scheme has environmental objectives, but in many circumstances these align with the needs of a farming business.
Whilst there are hundreds of options available, some are more popular than others. Annual payments for red clover and herbal grassland equate to £120 per acre per annum, whilst providing plenty of pollinator activity, they can still be highly productive and offer a decent income. An example of arable options include wholecrop cereal production for £200 per acre per annum and winter bird mix at £250 per acre per annum for those less productive areas.
The capital grant elements can often see alignment between farming and the environment too, for instance the ability to erect stock fencing to prevent livestock straying into a watercourse or damaging traditional hedgerows. Similarly, grants can include the roofing over of outdoor livestock feed yards to reduce dirty water pollution, the coppicing of historic hedgerows to maintain heritage or the planting of fruit trees to restore traditional orchards.
CSS has a history of being complex and bureaucratic with delayed payments and tiresome record keeping. However, each application is bespoke and can be tailored to the applicant and the farm; professional experienced advice is usually the difference between a successful live agreement and an incomplete application form that never quite gets submitted.
For more information and advice, contact James on 01404 46222 or 07899 955935.
This article was originally prepared for Evolution ABS Accountants