Rural bodies welcome advance for farmers on Basic Payments

THE DECISION to offer farmers an advance on the Basic Payment Scheme (BPS) to help ease rising costs has been welcomed by rural organisations.

The Department for the Environment, Food and Rural Affairs (Defra) has said it will be breaking the annual payment up into two instalments which will be paid in July and December to help farmers with their cashflow. This will continue during the agricultural transition period.

“While increasing farm gate prices may mean farm profitability remains stable, we recognise the short-term pressures on cash flow,” said Environment Secretary George Eustice when he made the announcement.

“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.”

The transition period which started in 2021 and will run until 2027, sees the Direct Payment system (BPS), part of the EU Common Agricultural Policy, being phased out and the new Environment Land Management Scheme which will pay “public money for public goods” being brought in.

NFU Vice President, David Exwood said the decision will provide some “much needed” help with business cashflow in the face of rapidly rising costs.

“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 Rural Payments Agency have recognised the seriousness of the situation and put in place a practical solution.”

However, Mr Exwood warned, it is crucial the 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.”

Mark Tufnell, President of the Country Land and Business Association (CLA), also welcomed the changes saying: “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.”

Paul Caldwell, chief executive of the Rural Payments Agency, said the changes being put in place for the outgoing system would be in line with the new agricultural policy.

“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.

“But 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.”

The deadline for 2022 BPS applications is May 16 and Mr Exwood urged farmers to get their claims in as soon as possible.

We recognise the short-term pressures on cash flow. Environment Secretary George Eustice.