The Department for Environment, Food and Rural Affairs (DEFRA) has issued responses to its consultation, ‘Direct Payments to farmers: Lump sum exit scheme and delinked payments in England’, outling the state support which will replace the existing direct payments to farmers.

The ‘Direct payments to farmers: Lump sum exit scheme and delinked payments in England’ consultation proposed two schemes to replace the existing direct payments scheme; the Lump Sum Exist Scheme and Delinked payments. Feedback on the new schemes is as follows:

Lump Sum Exit Scheme (LSES)

The LSES is intended to offer a lump sum payment to farmers exiting the industry in place of any Direct Payments they would otherwise be entitled to. 

Feedback on this scheme concluded:

  • It would help a small number of farmers leave the industry.
  • Farmers exiting the industry would benefit from the scheme along with established farmers looking to expand and, to a lesser extent, new entrants to farming.
  • Changes to eligibility criteria would help ensure the benefit was targeted at established farmers.
  • The average of 2018 to 2020 Basic Payment Scheme (BPS) should be the reference point for a lump sum payment and £100,000 was a popular choice as a cap.

Delinked payments

Delinked payments, which are to replace Basic Payment Scheme (BPS) payments, are not linked to the farming of land and aim to remove barriers to structural change and reduce farming rents.

Feedback on this scheme concluded:

  • Delinked payments should be based on an average number of years to remove anomalies.
  • Feedback on whether delinked payments should begin before or after reductions to Direct Payments was mixed.

Next steps

  • DEFRA will send out information about the key rules for Lump Sum and delinked payments to all BPS applicants.
  • Those who are considering leaving farming will be invited to request an estimate of the lump sum they could receive.

Useful guides on this topic

Farming: Overview
What is farming? What are the tax consequences and tax considerations of farming?  What are the features of agricultural tenancies?

Lump-sum retirement scheme for farmers: Consultation
The Department for Environment, Food and Rural Affairs (DEFRA) has published a consultation entitled 'Direct Payments to farmers: Lump sum exit scheme and delinked payments in England'.

Post-Brexit farming plan ‘blindly optimistic’
The Public Accounts Committee (PAC) has released a report covering DEFRA's proposals to replace farming subsidies following Brexit. 

External Links

Direct Payments to farmers: Lump sum exit scheme and delinked payments in England – Summary of responses


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