DEFRA criticised for sharp fall in delinked payments

Following the Spending Review last week, DEFRA has just released an overview of farming funding for the years between 2026 and 2029.

It has been announced that delinked Basic Payment Scheme (BPS) payments will be significantly cut next year.

DEFRA said that to maintain the overall farming budget and to increase investment in environmental land management, the government plans to “phase-out” delinked payments.

Its spokesperson added: “In line with our pledge to ensure that every penny of public money is spent as wisely as possible, the government is ending the era of payouts to large and wealthy landowners for simply owning land.

“These payments are based on past subsidies and do not provide value for money or support the environment.

“This will enable us to invest more in environmental schemes that will make a significant contribution to our Environment Act targets and will ensure that funding is targeted where it can have the greatest impact.

“By investing in nature, we help secure the foundations of long-term food security – including healthy soils, clean water and thriving ecosystems.”

DEFRA said that as the department continues to phase out direct payments, those who previously received the largest amounts have seen the biggest overall reductions since the start of the transition away from the EU system.

For delinked payments in 2026 and 2027:

• DEFRA plans to apply a 98% reduction to the first £30,000 of any delinked payment

• Any amount above £30,000 will be reduced by 100%.

‘Unwelcome’ cuts

Country Land and Business Association (CLA) experts explained that this year’s delinked payments were £330 million capped at £7,300 per business, but next year the delinked payments will be £20 million capped at £600 per business.

CLA president Victoria Vyvyan said: “In the context of last week’s Spending Review the sharp fall in BPS payments was expected but is nonetheless unwelcome. It will hit especially hard those whose profit margins are now cut to the bone.

“While there might be a consolation that the new SFI 2026 scheme could be ready for applications in spring 2026, there is as yet no clarity on what that will look like and who will have access to it.”

Ms Vyvyan added that the reduction in productivity investment over the next three years will also risk dampening investment at a time when businesses need to look at new technology and equipment to drive efficiencies and improve environmental sustainability.

DEFRA’s reformed schemes

DEFRA also announced that a “record” 50,000 farm businesses are now taking part in environmental land management schemes. Around half of all farmed land in England is now managed under these schemes.

A spokesperson for the department said: “As we have said, we will honour all existing SFI, Countryside Stewardship and Higher Level Stewardship agreements. We’ll also continue payments under previous agri-environment schemes until those agreements end.

“As ministers have said before, the reformed scheme will be more targeted to better meet priorities on food, farming and nature. More details will be published later this summer, but we know that for too long ELM schemes have been far too complicated, which is a problem that is compounded by the massive workloads that farmers across the country undertake.

“One of our key objectives is to ensure that the user experience of the schemes is prioritised, so that bureaucracy does not become a barrier between the schemes and these busy farmers.”

READ MORE: £100m cuts announced: ‘Farmers will need to do more with less’

‘Farmers need clarity’

NFU president Tom Bradshaw said that it is “positive” to see further detail from DEFRA on how the budget outlined in the Spending Review will be allocated. However, questions still remain about how farmers in England are going to deliver more for consumers with less, as investment in agriculture and nature recovery is combined.

“The increase in DEFRA’s Environmental Land Management schemes follows the rapid shift away from direct payments and will pay farmers for the public goods they deliver under these schemes. Farmers now urgently need clarity on the Sustainable Farming Incentive, which must be accessible to all farmers, to prevent ongoing cashflow pressures and ease a crisis of confidence.

“Continued investment in productivity and innovation is welcome. But to enable farmers to invest confidently in sustainability, the environment and animal health and welfare, we now need clear information on how these funds will be used.

“Farmers continue to sit at the heart of delivering the government’s ambitions, from boosting nature to ensuring food security. But it is also a long-term business, and further clarity from Defra must reflect that.”

READ MORE: Could you help Baroness Batters shape farm profitability review?

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