Delinking and Lump Sum Schemes - A Briefing
Produced by Landworkers' Alliance and Sustain: The Alliance for Better Food and Farming


Summary

The phasing out of Direct Payments is likely to cause some restructuring of the farming sector in England. To help ‘unproductive’ or retiring farmers leave the sector, Defra are considering two exit payment schemes: Delinking and Lump Sum. These will replace Direct Payments and support farmers in leaving their farming business. This might come with conditions, such as selling or renting land, which could provide opportunities for new entrants as well as land-based social enterprise. This should link with the Government’s New Entrants Support Scheme to create co-benefits and outcomes. However, without robust criteria, newly available land could be consolidated under existing large landowners and could be subject to poor farming or land management practice. There is more information on the changes to Direct Payments policy in the ‘Farming is changing – here is what you need to know’ webpage on GOV.UK: https://www.gov.uk/government/publications/future-farming-changes-to-farming-in-england/farming-is-changing-heres-what-you-need-to-know-august-2019-web-version

Key concern

Without a robust mechanism or set of criteria, any new land will be consolidated under existing large landowners who have the capital and resources to out compete new entrants and land-based social enterprise
 
Recommendations
 
1) A clear set of criteria with a robust mechanism must be integrated into the scheme to ensure that any land made newly available under Delinking or Lump Sum is prioritised for new entrants and land-based social enterprise.
 
2) Whilst delinking payments from the land is the objective, conditions need to be built into both schemes so that farmland is not environmentally degraded or damaged.

3) Any land prioritised for new entrants should be linked to the New Entrant Support Scheme and have clear channels of support attached. These should cover access to finance, markets, training and mentorship, as well as the opportunity to purchase or co-use farm machinery in land transference.
 

Delinking Explained

Defra intends to ‘delink’ Direct Payments from farming the land, regardless of whether a recipient decides to continue farming or not. At present, it is expected that delinking payments could be used by farmers to invest in productivity, expand their business, or retire from farming. The retirement option may present opportunities for new entrants in accessing newly available land and ongoing channels of support. This needs to be aligned with meeting best environmental land management practice.

Lump Sum Explained

Defra is also looking at the possibility of running a one-off exit scheme. This would allow a farmer to receive a lump sum payment if they chose to sell their land, stop farming and rent the land, or end their tenancy. This payment would be offered in place of continued receipt of Direct Payments. The land and recommended support channels made available through lump sum has the potential to increase business success and sustainability for new farming entrants.  This needs to be aligned with meeting best environmental land management practice.

Discussion

There is limited information on the eligibility criteria that will be set for farmers who want to apply for delinking or lump sum, what conditions will be attached and whether land will be prioritised for new entrants.

These schemes could be a vehicle for making land available for purchase or renting over the coming years, which presents opportunities for new entrants who experience access to land as their biggest barrier to farming. In addition, channels of support attached to newly available land (through the New Entrant Support Scheme) would increase the success and viability of new businesses through sufficient support mechanisms. Evidence is fairly scant, but examples from Ireland [1] and Australia [2] suggest that uptake can be low for exit-type schemes due for example, to payments being too low to incentivise uptake and cultural and livelihood attachments to land. Therefore, it is all the more pressing that any available land is not only prioritised for new entrants, but mechanisms are put in place to ensure robust environmental protection and the opportunity for access to skills and finance.

There is further information on the concerns surrounding delinking and lump sum schemes in this Landworkers’ Alliance article here: https://landworkersalliance.org.uk/lump-sum-payments/


Timeline

A public consultation on both schemes is set to be launched in March 2021. We will aim to issue a joint response with other interested parties.

The Delinking and Lump Sum schemes might not be implemented until later in the agricultural transition period. This could be 2022 for Lump Sum and as late as 2024 for Delinking. Defra has not yet issued a concrete timeframe for introducing these schemes.


Please fill in your details below if you wish to be a joint signatory to our consultation response. If you have anything to add, or would like to find out more, please contact:

Georgie Styles, New Entrants Policy and Campaigns Officer, Landworkers’ Alliance georgie.styles@landworkersalliance.org.uk

James Woodward, Sustainable Farming Officer, Sustain: The Alliance for Better Food and Farming
james@sustainweb.org

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