BPS brought forward to help with farm cashflow
FARMERS are to benefit from an advance of this year’s Basic Payment Scheme as the Government moves to help ease cashflow problems.
The Department for Environment, Food and Rural Affairs has announced that direct payments will be paid in two instalments each year for the remainder of the agricultural transition period.
This extra support comes in response to the spiralling input costs hitting farm businesses in the South West and across England, caused by global demand and instability.
The deadline for submitting BPS 2022 applications is Monday, May 16 and, under these plans, farmers with eligible applications will receive the first payment of 50% from the end of July and the second from December.
With agricultural commodities closely linked to global gas prices, farmers are facing rising costs for inputs including fertiliser, feed, fuel and energy. Due to heightened worldwide demand as the global economy reawakened following Covid, by February the price of gas had quadrupled on the previous year, and with the instability caused by the war in Ukraine that price has risen further.
Environment Secretary and MP for Camborne, Redruth and Hayle, George Eustice, explained: “While increasing farm gate prices may mean that farm profitability remains stable, we recognise the short-term pressures on cash flow.
“We have decided to bring forward half of this year’s BPS payment as an advance injection of cash to farm businesses from the end of this July. It will give farmers some additional cashflow earlier in order to provide some confidence. We will also make this a permanent change to the way that we pay BPS in future, with twiceyearly instalments going forward.
“In the days of the EU, this would never have been possible due to the way audits worked and the need to enforce the three crop rule during the summer.”
Paul Caldwell, chief executive of the Rural Payments Agency, said bringing forward half of this year’s BPS payment would provide a “welcome boost” to cash flow for many farm businesses.
He added: “This is not just an opportunity to support farmers here and now through a cash injection. It’s a permanent change to bring direct payments in line with what will become a more regular payment system under the new Environment Land Management schemes.”
The National Farmers’ Union said the decision by Defra would provide some much-needed help with business cashflow in the face of rapidly rising costs.
David Exwood, vice president of the NFU, said: “With farmers facing extreme inflationary pressure and businesses being squeezed more than ever, any advance payment of BPS claims for this year is positive and will help cashflow. I’m pleased Defra and the RPA have recognised the seriousness of the situation and put in place a practical solution.
“However, it’s crucial that this change does not adversely affect the delivery and promptness of payments. As Defra plan to move forward with two payment windows on a permanent basis, we will be looking for reassurances from the RPA that it will continue its strong delivery performance and ensure farmers receive their payments as early as possible on both occasions.
“With the BPS claims deadline looming, I would urge all farmers to get their claims in as soon as possible, making sure all details are correct and up-to-date.”