More than £158m will be shared by over 15,600 farms across Wales as Basic Payment Scheme (BPS) 2023 advance payments are made today, Welsh rural affairs minister Lesley Griffiths has announced.

As a result over 96% of claimants will see a BPS advance payment worth approximately 70% of their estimated claim value.

This year, for the first time, Rural Payments Wales (RPW) will be making BPS advance payments during a payment window.

The new payment window will run until 15th December. Farm businesses not receiving an advance payment tomorrow, but whose claim is subsequently validated before 15th December, will receive the advance payment.

Full and remaining balance BPS 2023 payments will be made from 15th December 2023, subject to full validation of the BPS claim.

It is expected all but the most complex BPS claims will be fully validated, and payments made before the end of the payment window on 30th June 2024.

“Major boost for farm cash flows”

NFU Cymru president Aled Jones commented: “This support will be a major boost for the cash flow of more than 15,600 Welsh farmers, along with the allied industries who rely on farmers for so much of their income.”

With the level of ‘agri-inflation’ running around 40% higher in 2023 than 2020, and output prices not keeping pace with input prices, the news is particularly welcome.

“Through the successive crises of the global pandemic and the Ukraine war, Welsh farming has remained committed to food production and providing consumers with safe, high quality, affordable food. Welsh Government’s role in providing stability and certainty to farmers through the BPS has been crucial to this,” Aled Jones added.

“The continuation of this stability payment is as important now as it has ever been and why it is crucial that stability measures remain as a key part of the long-term agricultural policy framework in Wales. The Sustainable Farming Scheme must maintain at least the same level of stability, for all farm sectors and types, as that currently provided by the BPS.”

He welcomed the maintenance of the BPS budget for 2023 and stressed the importance of continuing this into 2024.

“It is important to recognise that the budgets for agriculture remain at levels established a decade ago and, in that time, have not been adjusted for inflation. Taking account of inflation and using the Bank of England inflation calculator, the BPS should increase by £79 million from £238m to £317m just to stand still.”

Mr Jones concluded by noting that some businesses will not receive the advance payment today, but welcomed changes by the RPW that mean some of these businesses will not have to wait until 15^th December.

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The new scheme has also been found to have major flaws and inaccuracies in the farm maps published last week.

The FUW said there is “real anger” about the scheme among Welsh farmers, many of whom have participated in environmental schemes for decades.

FUW president Ian Rickman said: “The scheme was foisted upon the industry at the 11th hour as a done deal, and while a small number of improvements have been made in response to FUW calls, it has certainly not been developed in cooperation with the farming industry as it should have been.

“The FUW has been clear in its warnings regarding the scheme since it was announced as the replacement for Glastir in July, and these warnings have come true.”

The Union is also concerned about the continued lack of clarity on the scheme budget and that the payment rates are significantly below what farmers would have received under the Glastir schemes.

“Many of our members are telling me that they are not going to enter the scheme because the income foregone and costs incurred payment rates fall well below their true value, meaning it is financially unworkable and not manageable in the real world,” Mr Rickman stressed.

“Some members have been in agri-environment schemes for up to 30 years yet they’re not going to apply because the rates are lower than they were decades ago. Surely that goes against what should be the Welsh Government’s objectives for a habitat scheme?”

Mr Rickman said the FUW has always been happy and willing to work with the Welsh government when it comes to designing Wales-specific policies and that the decision to design the scheme in isolation without union input and announce it as a finished article just weeks before launching it demonstrated the dangers of not listening to the industry.

He added that even with the support provided to government officials by FUW, the scheme remains unaffordable for many Union members.

“The Minister must therefore urgently review this scheme as it will fail thousands of farmers in its current form,” he concluded.

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The purpose of increasing rates is to meet the request from levy payers to deliver more key services, including marketing and exports for the beef and lamb, dairy and pork sectors and more independent research for cereals and oilseeds.

The proposals come at a time when AHDB’s spending power has been greatly reduced by rising costs, which have been particularly affected by the increase in inflation.

Levy payers are being given the opportunity to ask questions about the proposals over the coming weeks, including during AHDB’s Funding Your Future livestream event on Thursday, 9^th November 2023.

Sector councils will make a final recommendation to the AHDB Board, which will put the proposals to government ministers and devolved administrations later this year. The proposed levy rates are as follows:

Beef and Lamb (levy rate last set in 2011)

Cattle (excluding Calves)
Producer – £4.05 to £5.06/head of cattle
Slaughterer/Exporter – £1.35 to £1.69/head

Calves
Producer – £0.08 to £0.10/head of cattle
Slaughterer/Exporter – £0.08 to £0.10/head

Lamb
Producer – £0.60 to £0.75/head of sheep
Slaughterer/Exporter – £0.20 to £0.25/head of sheep

Cereals and Oilseeds (levy rate last set in 2011)

Cereal grower – 46.00p/tonne to 58p/t
Cereal buyer – 3.80p/t to 4.80p/t
Cereal processor (human/industrial) – 9.50p/t to 12p/t
Cereal processor (feed) – 4.60p/t to 5.80p/t
Oilseeds – 75 p/t to 94 p/t

Dairy (set more than 20 years ago)

Dairy farmer – 0.06p/litre to 0.08p/l

Pork (levy rate last set in 1996)

Pig producer – £0.85 to £1.02
Pig processor – £0.20 to £0.24

AHDB chair Nicholas Saphir said while there is never a right time for such proposals, with the board’s spending power drastically reduced and inflation alone eroding the value of levy by around 40%, the decision could not be further delayed.

“The message from levy payers through Shape the Future was clear, that key services provided by AHDB, such as independent research, the Strategic Farm networks, activity to identify new export markets as well as domestic marketing, are seen as vital to levy payers,” he said.

“The Sector Councils are right to explore the option of increasing the current rates but by taking a proportionate approach that takes into account the impact of the current economic climate on farmers, producers and processors. Therefore, I do recommend that you fully support the proposed increases.”

QMS calls for levy increase to fund ‘vital work’

Proposals to increase levy have also been submitted by Quality Meat Scotland (QMS), the public body responsible for promoting the PGI labelled Scotch Beef and Scotch Lamb brands in the UK and abroad, as well as Scottish pork products under the Specially Selected Pork logo.

Commenting on the proposals, QMS chair Kate Rowell said: “QMS has not requested a levy increase since 2010, and we want to remain fit for the future of Scotland’s iconic Scotch brands, promotional work and market development.

“With this in mind, as we announced at the Royal Highland Show, we plan to hold industry workshops throughout Scotland during November and December, to discuss the delivery of our five-year strategy and, as agreed by the QMS board, a proposed levy increase to fund this vital work.”

To maintain good value for money, QMS will propose a new mechanism for setting the levy from Spring 2024, which will involve a small increase to fees each year to keep pace with inflation, Ms Rowell explained.

“This mechanism will be reviewed at the end of the five years, to ensure it remains fit for purpose,” she added.

Levy payers can find out more about the details of the proposals by visiting www.ahdb.org.uk.

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The minister for rural affairs Lesley Griffiths announced this Monday (25th September) that applications for the Habitat Wales Scheme will open on Friday 29^th September, with contracts commencing in January 2024.

The scheme is meant to ensure a seamless transition from the end of Glastir in December 2023 until the start of the Sustainable Farming Scheme in 2025 and will be available to all eligible farmers, including Glastir Advanced, Commons and Organic farmers, the minister has confirmed.

However, details around the budget for this new interim scheme are still unclear, and NFU Cymru said this ambiguity is unsettling for those considering entering the scheme, particularly the thousands of farmers who have previously held Glastir contracts.

NFU Cymru Rural Affairs Board Chairman Hedd Pugh said: “As developments unfold we are increasingly anxious for Glastir contract-holders, many of whom have been participants in agri-environment schemes for decades and who have adapted their businesses as a result, who could well lose a significant part of their income in 2024.

“We’ve had no reassurances that the new, interim scheme will match levels of income currently received through Glastir.”

In her statement, the minister reminded the public that the financial position of the Welsh Government is up to £900m lower than was predicted at the last spending review in 2021, which she wrote is due to ‘very high inflation and energy prices and the mismanagement of the economy by the UK Government.’

She added the Cabinet has been working throughout the summer to try and mitigate these budgetary pressures and will be confirming the budget for the scheme once this work has completed.

Meanwhile, Mr Pugh highlighted it will be difficult for farmers to commit to the scheme when payment rates are still unclear.

“For an industry that is so reliant on certainty and long-term planning – and having weathered significant financial storms and volatility in the last year – it is very difficult for farmers to make a commitment to this scheme when we still don’t know the budget available with only three months until the scheme begins,” he said.

“To maintain the confidence of farming in the proposed direction of travel, the budget of around £35m for agri-environment must be at least maintained.”

Update: FUW “extremely concerned” over scheme budget

On 2^nd October, the Farmers’ Union of Wales (FUW) has repeated its concerns that there is still no clarity around the budget available for the Habitat Wales Scheme, which launched on Friday 29^th September 2023.

It is understood that more than 17,000 Welsh farmers may be eligible to apply for the scheme, which is set to replace former Glastir payments.

FUW president Ian Rickman said: “We are extremely concerned by the lack of clarity on the budget available. The uncertainty for farming business is immense and no business should be expected to operate under such circumstances.”

He pointed out that confirmed payment rates for the new scheme are on average 45% lower than payments for habitat land under Glastir Advanced.

“Reduced payment rates along with the loss of whole farm management payments and support for capital works means that those currently in Glastir will receive significantly smaller payments next year if they decide to enter the scheme.

“In addition, due to time constraints, the Welsh Government will not have the ability to deal with mapping issues or offer a second round of contracts beyond 1 January 2024, even if the budget allowed,” he added.

While the FUW said it understands the pressures on the rural development budget, not least as a result of cuts made by the UK Government, it is essential that the Habitat Wales Scheme receives at least as much funding as the schemes it will replace.

Members who are concerned about the application forms are encouraged to speak to their local county office.

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The leaflet, which has been prepared by William Waterfield of the Farm Consultancy Group, is based on independent research highlighting the high environmental status of organic farms, which growers can capitalise on by stacking SFI and CS payments, said Roger Kerr, chief executive of OF&G.

“The data presents a robust argument to farmers considering converting to organic to take that positive step and full advantage of the new schemes,” he added.

The study incorporates two farm case studies – one predominantly arable, the other mostly livestock – of 210 hectares, which is the average size of organic farms certified by OF&G.

The technical leaflet shows the income comparison between old BPS and the combined CS and SFI payments, revealing an increase from £48,510 to £68,671 for the livestock farm and from £48,510 to £73,061 for the arable farm, with the latter equating to a 50.6% increase.

Given the substantial financial benefit, the organic certification body anticipates a significant divergence in the way English farms are managed following the roll out of Defra’s environmentally-driven policies.

Mr Kerr believes some farmers will be ready to take the new principles on board, while others will reject the schemes and will go all out for increased production and yield.

“Opting for the second route of increasingly intensive farming practices, which may produce higher yields in the short-term, will come at a huge environmental and societal cost and undermine the very basis of production and long-term food security,” he noted.

“We must build back resilience in our farming systems and embrace the transformational change this policy seeks to encourage,” Mr Kerr concluded

The technical leaflet can be downloaded from the OF&G website here: https://ofgorganic.org/docs/sfi-and-cs-for-organic-farmers-sept-2023.pdf

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As of yesterday (18^th September), invitations to apply have been sent out to farmers who have already registered their interest in the scheme with the Rural Payments Agency.

SFI 2023 has been expanded and made more flexible in response to farmer feedback and now offers 23 paid-for actions including on hedgerows, nutrient management, farmland wildlife and low-input grassland.

A new ‘pick and mix’ structure ensures farmers can choose a combination of actions that works for their business, unlike previously where actions were grouped into standards.

According to Defra, thousands of farm businesses of all types and sizes have already submitted an expression of interest, and the first agreement under the new SFI scheme has been issued.

As per last week’s announcement, farmers with a live SFI agreement before the end of the year will receive their first quarterly payment – worth 25% of the annual value of their agreement – by the end of this year.

This will typically be paid in the first month of their agreement starting, and there will be no cap on what individual farmers can do in the scheme or overall numbers of applications.

Secretary of state for food and farming Thérèse Coffey said: “I have been delighted by the registrations of interest from farmers across a diverse range of farm types in our new Sustainable Farming Incentive scheme.

“We’ll be working to get as many farmers onto the scheme as quickly as possible, so that they get payments in their pockets and are rewarded for the enthusiasm with which they are embracing this scheme.”

Among the early adopters of the scheme were farmers with existing Countryside Stewardship and Environmental Stewardship agreements. Those with existing SFI 2022 agreements are also able to express their interest, and invitations to apply have already been sent to some SFI 2022 agreement holders.

In addition, Defra has put in place an automated service that will enable farmers to apply online and agreements to be processed more quickly than in previous years, meaning most applicants can get started in their agreement within a few weeks.

Farmers are encouraged to pre-register for the scheme and then await an invitation to apply, with Defra confirming these will be sent out as quickly as possible. This is to ensure farmers are supported to have all necessary information in place, including online maps and land use/cover details, so they are ready to proceed when invited to apply.

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Current Glastir Advanced, Commons and Organic area-based contracts are coming to an end in December 2023, to be replaced by the Welsh Government’s new Habitat Cymru Scheme, which will see farmers paid per hectare of eligible habitat land.

The eligibility criteria covers habitat land previously under management in 2023; additional mapped habitat land, not currently under paid management; as well as maintaining environmental support for common land.

The budget for the scheme and payment rates have yet to be announced by the Welsh Government.

The new interim scheme was top of the agenda at NFU Cymru’s Rural Affairs Board, which met earlier this month.

Hedd Pugh, chair of the Rural Affairs Board, commented: “In a letter to the Minister last month, NFU Cymru stressed the need to provide a stable and well-planned transition from current to future schemes.

“We have welcomed Welsh Government’s reassurances that it intends to make this period of change as easy as possible for farmers through offering a fair transition over several years and making sure there is no cliff edge in funding.”

However, Mr Pugh added it was “deeply concerning” that the government seems to have made a decision without extensive impact assessment and economic modelling, leaving thousands of farmers at risk of losing a significant portion of their income from the end of the year.

“For contract holders, Glastir is a critical component of farm business incomes, including supporting the organic farming sector in Wales,” Mr Pugh stressed. “With farm input costs through the roof and interest rates soaring, the loss of Glastir leaves farmers currently under contract in a worrying situation.”

Along with the Board, he called for the extension of the current Glastir scheme through 2024 and the new habitat scheme to be offered to farmers not currently holding Glastir contracts.

“The maintenance of current funding levels for farming through the Basic Payment Scheme in 2024, alongside the provision of adequate funding for agri-environment is going to be essential to maintaining the confidence of the industry ahead of Welsh Government’s proposed introduction of the Sustainable Farming Scheme from 2025,” he concluded.

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Following feedback from industry, the government has extended the application window for CS 2024 Mid-Tier agreements by four weeks to 15^th September to give more time for farmers and landowners to submit their applications online, resulting in a further 600 applications being received.

Defra has confirmed today that all those who started their application by this deadline or who submitted land changes with the intention to apply will receive support from the Rural Payments Agency to ensure they have sufficient time to complete these.

“I want as many farmers as possible to be able to sign up to our successful Countryside Stewardship scheme which is boosting food production, protecting the planet, and supporting farmers to run profitable businesses,” said food and farming secretary Thérèse Coffey.

“This is why I extended the initial deadline for Countryside Stewardship 2024 and am making sure that anyone who started their application by the deadline will be given the time and support to complete this.”

CS runs alongside the government’s other agri-environment schemes, including the Sustainable Farming Incentive (SFI) and Landscape Recovery, that have been developed to replace the old Basic Payment Scheme (BPS).

Applications for SFI 2023 scheme will open next week on 18^th September, and Defra has assured thousands of farmers will benefit from the new accelerated payments this year.

Improvements to the new CS scheme have included increasing payment rates on both revenue and capital items; simplifying and improving options to make them more workable on the ground; and making administrative processes more efficient.

Further improvements to come include greater flexibility over when farmers can apply and how they manage their agreements, with improved access for tenant farmers and increased access to Higher Tier options and agreements.

Farmers can be part of both CS and SFI at the same time, as long as the actions are compatible and they are not being paid for the same action twice.

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Further to the NFU calling on ministers to “do the right thing” and bridge the financial black hole in farm support caused by significant delays to the launch of SFI 2023, secretary of state Thérèse Coffey announced on Tuesday that farmers who are accepted into the scheme will receive 25% of their agreement’s value this year.

NFU president Minette Batters said the news will bring relief to many farmers, but stressed it doesn’t make up for the government failing on its promises to deliver a replacement for the Basic Payment Scheme (BPS) on time.

“While this announcement will provide welcome progress, it doesn’t go far enough to deliver on the promises made countless times that the replacement to BPS would be open to all, less bureaucratic and offer a profitable and seamless transition from old to the new. What we have today, after years in the making, is still a million miles away,” she said.

“In the short-term, we need the government to bridge the gap it has created in taking away one set of payments before delivering access to their replacements by ensuring farm support payments made in December are not capped as currently planned.”

Defra’s plans to accelerate SFI payments came alongside a number of new measures aimed to boost British farming, including support for a ‘buy British button’ in online supermarket shopping, a new grant scheme for rooftop solar panel installation, and a new £4m fund to help upgrade small abattoirs to improve animal welfare, business efficiency and productivity.

NSA chief executive Phil Stocker welcomed the announcements, and was especially pleased to see progress being made with SFI and helping farmers access public procurements markets.

Commenting on the latest changes to SFI, he said: “Speaking to many NSA members it is clear the principles are largely in line with our values and also the scheme seems to be working and encouraging ‘good actions’ on the farm.

“We look forward to SFI, Countryside Stewardship, and all the new Future Farming schemes being further developed and simplified in due course, and are keen to see more development of options for upland farmers based on ‘whole farm principles’ that support traditional sensitive approaches in the very near future,” Mr Stocker added.

Further clarity on buying British

The government backing calls for retailers to signpost customers to ‘Buy British’ when they shop online was also well received, with Mr Stocker pointing out the NSA has been campaigning for such a measure for a long time.

“Allowing consumers to have better, clearer access to British produce will be key in ensuring the environmental gains, public goods, and sustainable produce is clearly and readily available to consumers across the UK and boost our own self sufficiency and reduce our reliance on high environmental impact food imports,” he said.

Commenting on the announcement, NFU Scotland chief executive John Davidson added: “As part of today’s celebration, we very much welcome the petition led by NFU that seeks to stimulate more local sourcing by making it easier for the growing number of consumers who choose to do their grocery shopping online to buy local.”

He concluded the union will continue to work closely with retailers to further support our farmers, crofters, environment and the economy.

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Despite repeated assurances from senior officials that SFI 2023 will be up and running by the end of August, delays to the scheme’s launch have left farmers with a bleak outlook for the rest of the year.

While producers could submit an “an expression of interest” for the scheme on 30^th August, applications will not be accepted until 18^th September, which is when SFI 2023 is officially set to open.

To spare producers from the ‘double whammy’ of thinning BPS payments and a lack of funding to replace those, the NFU has called on the government to treat farmers fairly and halt all further reductions via the old scheme until SFI delays have been resolved.

Recognizing the challenges the industry is facing, Defra has today announced that farmers who have a live SFI 2023 agreement before the end of the year will receive an accelerated payment – worth 25% of the value of their agreement – in the first month of the scheme.

The move is aimed at helping producers with cashflow and making sure SFI works for farm businesses.

Food and farming secretary Thérèse Coffey said: “Today’s announcements are acting on commitments made at the Farm to Fork Summit and driving forward our new farming schemes to deliver a profitable and sustainable food and farming sector that delivers for people and our planet now and into the future.”

Farming minister Mark Spencer added: “I continue to do all I can to support British farmers and growers and our flexible new farming schemes and continued investment in technology and automation are already delivering positive outcomes for domestic food production and the environment.

“I will continue to work closely with the sector to take on board feedback to ensure our schemes work in the best possible way so farmers can run profitable and sustainable businesses into the future.”

Other announcements made by Defra today to showcase support for British farmers include plans to appoint five additional agri-food attaches to unlock new trading markets and promote British produce around the world.

The government will also support small abattoirs in helping farmers reach local and international markets by launching a £4 million Small Abattoir Fund by the end of the year to improve productivity, enhance animal health and welfare, and encourage investment in new technologies.

Last but not least, farmers will also be able to apply for a share of a new £30 million funding pot intended to boost the uptake of solar equipment, automation and robotics on farms. This will help farmers reduce fossil fuel use, improve energy resilience and accelerate progress towards net zero.

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