Payments to be brought forward as helping hand
THE Government has said it will move to help farmers faced with cost pressures by bringing forward direct payments. With the deadline for this year’s Basic Payment Scheme later this month, Defra has said it will pay 50% of money to farmers from the end of July and the rest from December.
Many farmers are facing significant increases to their costs, particularly from energy and fertiliser, while a number of producers are also suffering from labour shortages.
The Government said it hoped its actions to bring forward payments will allow farmers to continue to invest in their businesses.
Environment Secretary George Eustice said: “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 we pay BPS in future with twice yearly 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.”
Rural Payments Agency chief executive Paul Caldwell said: “Bringing forward half of this year’s BPS payment from the end of July will be a welcome boost to cash flow for many farm businesses during uncertain times.
“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 be a more regular payment system under the new environment land management schemes.”
A number of farming and rural economy groups have raised concerns in recent weeks about the impact of rising prices for agricultural businesses, which are being driven by a number of factors, including the war in Ukraine.
Country Land and Business Association (CLA) president Mark Tufnell said: “The CLA welcomes the move by the government to advance the Basic Payment Scheme instalment to July.
“As this is an issue that the CLA has been calling for action on for the benefit of our members, it is encouraging to see that Defra has recognised the current cashflow and inflationary constrictions the agricultural sector is facing, and consequently has implemented measures to help relieve these pressures at such a difficult time.”
NFU vice president David Exwood 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 cash flow. I’m pleased Defra and the RPA has 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.”