Are Farmers Making The Most Out Of Agri-Environment Schemes and Diversification?
The farming industry has always been forced to adapt to new challenges in the ever changing political, economic, and environmental landscape. A recent study from a group of researchers at the University of Reading, Newcastle University, and agricultural science research group Rothamsted Research, found that farmers who invest in diversification, perform low intensity farming, and partake in environmental management are more likely to have a stable income in both the short and medium term.
In our latest article, Mike Bracegirdle, Head of Agriculture and Partner of the Firm, takes a closer look at the study and provides an introductory overview to Agri-Environment schemes, which may offer farmers the possibility of diversifying their income.
The study used data from a farm business survey collected from over 2,000 farms between 2007 and 2015. The researchers also found that the incomes of farms that received direct subsidiaries, rather than income from agri-environment schemes, were generally less financially stable in the short and medium term.
Furthermore, farms in less favoured areas – such as upland livestock farms – did not see the same stability benefits from agri-environmental payments. This is likely because these farms are already operating in a challenging environment, or the schemes might not be available to them due to being unable meet the requirements necessary to capitalise on the available schemes.
The study further concluded that the farmer should not put all their “eggs into one basket”, and that greater diversification provided a more consistent year to year income.
Most farmers are fully aware that as the current basic payment scheme (support scheme) is being phased out, and that environmental schemes are going to assume much greater importance to provide consistent income and stability.
What Are Agri-Environment Schemes?
Agri-Environment schemes are designed to incentivise farmers to adopt farming practices that are more sustainable and environmentally friendly. Depending on the scheme, location, and type of farm, this might include farming in ways that support ecosystems and biodiversity, protect or improve landscapes, maintain the integrity of historical sites, protect and improve the quality of air, soil, water, and so on.
There are two main types of agri-environment schemes; entry-level and higher-level. As one might expect, the entry-level schemes require less of the farmer, aiming to be accessible, easy to implement, but still effective. On the other hand, higher-level schemes will require significant changes to how a farm operates, but the incentives will be more lucrative.
It is important to note that not all farms will be eligible for every scheme (as the aforementioned study highlighted). Indeed, higher-level schemes are only eligible for farms that are seen by the government as having significant environmental value. For example, smaller upland farms might not be eligible for higher-level schemes because they are likely less environmentally unfriendly to begin with.
Examples of Agri-Environment schemes include:
- Environmentally Sensitive Areas (ESA): This scheme targets areas that have high value for biodiversity, history, culture, and wildlife. Introduced in 1987, there are currently 22 ESAs in England, including The Lake District and the Pennine Dales, and 10 in Scotland.
- Entry-Level Stewardship (ELS): Unlike the other stewardships you will read about below, the ELS is available to all farm owners. It is designed to allow any and all farmers to implement simple environmental practices to their farming in exchange for financial rewards.
- Countryside Stewardship (CS): Set up in 1991 and relaunched in 2004, the Countryside Stewardship aims to conserve and restore wildlife habitats, reduce the risk of flooding, encourage education access to the countryside, and more.
- Higher Level Stewardship (HLS): This is often combined with the CS and requires more complex measures to be taken on by the farmer or landowner. The measures will likely be supported by Rural Development Advisors.
Please note that these schemes (other than the ESA) are only available in England. There are other schemes available in Scotland and Wales. The above list of schemes is by no means exhaustive, and we recommend that carry out further research to get the best idea of what schemes are available.
How Can Butcher & Barlow Assist?
Butcher & Barlow work closely with those in the farming community in relation to both preparing and updating their essential business plans. We can advise as to the suitability of a new business structure (for any proposed diversification projects) to assist with business plans and succession planning including lasting powers of attorney and Wills.