OPINION: Farmers must adapt quickly to life after Brexit transition
- Credit: Brown & Co
As 2021 begins, farmers must make urgent plans to adapt to major changes after the Brexit transition says Andrew Fundell, a partner in the agricultural business consultancy at the Norwich office of Brown and Co.
As we turn our backs on 2020, a year many wish to forget, we look to the future.
The New Year is often when businesses and individuals have time to reflect and make plans.
A question we often face is: "How then can we plan the business with so many unknowns?”
Defra has been clear in its business plan for agriculture until 2028 and that is:
- A renewed agricultural sector, producing healthy food for consumption at home and abroad, where farms can be profitable and economically sustainable without subsidy.
- Farming and the countryside contributing significantly to environmental goals including addressing climate change.
You may be forgiven for thinking that a policy developed by a government that considers that sheep can be turned into cattle at a moment’s notice has some way to go, but whilst of course there are details to follow there is a clear direction of travel laid out in the agricultural transition plan.
With the Basic Payment Scheme (BPS) reducing in the next four years from its current level of approximately £230 per hectare by at least 50pc, cashflow pressures will increase.
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Realists will not see the new Environmental Land Management schemes (ELMs) as a replacement for the gap that is left when BPS is removed - Defra only anticipates a 70pc uptake in ELMs.
If you plan on exiting the industry there will be a one-off opportunity in 2022 to take a "lump sum" payment but there is a lot to think about, and quickly.
If however you wish to prosper in the period after the transition period you should act now and possibly radically change your business.
It’s not all bad news for those who are willing to change – but change we must.
Funding is available, whether that be though Countryside Stewardship or other capital grants as the government has pledged that money will be redirected from BPS (£170m in 2021 to more than £970m by 2024).
Some have started the journey, but those that have not, now really is the time (and it is urgent) to work up a plan for you, your family and your business.