Are you prepared for BREXIT? Agriculture
Agriculture is perhaps a sector which will be impacted more than most following BREXIT.
With lobby groups debating the importance of on-going financial support for farmers following BREXIT, the Government has now published the long awaited Agriculture Bill.
What does it mean for English farmers following BREXIT:-
- Farmers will be entitled to make a claim under the existing Basic Payment Scheme (BPS) in 2019 and 2020. Whilst the application process is likely to remain unchanged for these two claim years, the Government is keen to ease administration of the scheme so we may see some changes along the way. For example there is talk of dropping the “greening” requirements.
- Following 2020 we will then enter a 7 year transition period. Between 2020 and 2027 the Basic Payment Scheme will be phased out with a reduction in the amount of payment received.
- The amount of the reduction of the payment received will be linked to the amount of the claim. For example those farmers who are making a claim for support in excess of £150 000 will see the greatest reduction in their payments.
- Farmers will experience a specified % reduction on the amount of support received within a relevant band. For example payments up to £30 000 will be cut by 5%. The proportion of support received between £30 000 and £50 000 will experience a 10% reduction and such proportion in excess of £150 000 as much as 25%.
- There is also a proposal to “delink” the Basic Payment Scheme from farming activities to encourage diversification and business growth. The details of “delinking” are yet to be confirmed but it may be that carrying an “agricultural activity” will no longer be necessary for the land to be considered “eligible” for the payment.
- The Government may also allow claimants to essentially capitalise the payment due throughout the transitional period by taking a one off lump sum payment. This could have interesting implications for divorce or partnership settlements where access to capital plays an important part in negotiations.
- Following the 7 year transitional period the Government’s vision for the future is a payment model for public goods such as land, animal and environmental management. Interesting times ahead!
Be prepared for the changes and call us to discuss succession planning for your agricultural business.
Sarah Denney-Richards, Director, Head of Agriculture and Estates
Telephone; 01905 730486 Email;firstname.lastname@example.org