The Public Accounts Committee (PAC) has released a report covering DEFRA's proposals to replace farming subsidies following Brexit. The PACs says Defra itself concedes “its confidence in the scheme looks like blind optimism”, noting that Defra has given no detail about how either the necessary productivity increases or environmental benefits will be brought about, nor how these will offset the new Environmental Land Management Scheme’s dramatic effect on English farmers, who will see their income from direct payments reduce by more than half by 2024-25.
The Department for Environment, Food & Rural Affairs (DEFRA) is introducing the Future Farming and Countryside Program (FFCP) which will replace the Common Agricultural Policy (CAP) with aims to:
- Improving the environment.
- Protecting the countryside.
- Improving farming productivity.
- Improving animal health and welfare.
The FFCP plans to do this by replacing direct payments to farmers, and instead, providing income contingent on landowners providing environmental benefits.
The PAC comments on the schemes conclude that:
- Despite knowing the CAP was being replaced since 2016, there has been a lack of information about alternative proposals which has made business planning for farmers difficult.
- The lack of detail has caused anxiety exacerbated by a lack of trust between farmers and DEFRA.
- There had been incomplete analysis of the impact of the FFCP by DEFRA, in particular, the risk that the FFCP will cause more food to be imported rather than home-grown.
- DEFRA has not established whether the proposed £2.4bn of payments offer value for money, or contribute sufficiently to wider environmental goals.
- Subsidies make up an important part of farming income and the lack of a suitable replacement to the CAP could lead to farmers going out of business with an additional environmental cost.
The Government has two months to respond to the PAC’s comments.
Useful guides on this topic
What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies?