Plans to bring forward BPS payments welcomed
6th May 2022
Defra has announced plans to make Direct Payments in two instalments each year to help farmers with cashflow.
Defra’s decision to offer a 50% advance on farmers’ BPS payments this year will provide some much-needed help with business cashflow in the face of rapidly rising costs, the NFU has said.
Direct Payments in England will be made in two instalments each year for the remainder of the agricultural transition period, Defra has revealed.
The deadline for submitting Basic Payment Scheme 2022 applications is Monday 16th May 2022 and, under these plans, farmers with eligible applications will receive the first payment of 50% from the end of July and the second from December.
NFU vice president David Exwood commented: “With farmers facing extreme inflationary pressure and businesses being squeezed more than ever, any advance payment of BPS claims for this year is positive and will help cash flow. I’m pleased Defra and the RPA have recognised the seriousness of the situation and put in place a practical solution.”
However, Mr Exwood said it’s crucial that the change does not have an adverse impact on the delivery and promptness of payments.
“As Defra plan to move forward with two payment windows on a permanent basis, we will be looking for reassurances from the RPA that it will continue its strong delivery performance and ensure farmers receive their payments as early as possible on both occasions. We’d ask the RPA to continue working with the NFU on the rollout and delivery of the scheme,” he added.
“With the BPS claims deadline looming, I would urge all farmers to get their claims in as soon as possible, making sure all details are correct and up-to-date.”
The move has been made as farmers face rising costs for inputs including manufactured fertiliser, feed, fuel and energy. Due to heightened worldwide demand as the global economy reawakened following Covid, by February the price of gas had quadrupled on the previous year, and prices have risen still further as a result of the instability caused by the war in Ukraine.
Environment secretary, George Eustice, said: “While increasing farm gate prices may mean that farm profitability remains stable, we recognise the short term pressures on cash flow.
“We have decided to bring forward half of this year’s BPS payment as an advance injection of cash to farm businesses from the end of this July. It will give farmers some additional cashflow earlier in order to provide some confidence. We will also make this a permanent change to the way we pay BPS in future with twice yearly instalments going forward.”
Rural Payments Agency chief executive Paul Caldwell added: “Bringing forward half of this year’s BPS payment from the end of July will be a welcome boost to cash flow for many farm businesses during uncertain times.
“This is not just an opportunity to support farmers here and now through a cash injection. It’s a permanent change to bring Direct Payments in line with what will be a more regular payment system under the new environment land management schemes.”