Farming industry at risk as payments are cut by government

14 February 2023, 07:17 AM
  • Cuts to post-Brexit farming payments mean farms risk going out of business as new figures reveal only a tiny fraction of slashed EU subsidies went to agriculture businesses last year
Farming industry at risk as payments are cut by government

The government is replacing the EU’s Common Agricultural Policy (CAP), which paid subsidies to farmers to keep them in business, with ‘payments for public goods’, meaning land managers are paid for improving nature.

Each year, ministers are cutting how much farmers get paid under the old scheme while they introduce new ones, starting with the launch of the sustainable farming incentive (SFI). This paid farmers for looking after their soil.

While subsidies were cut by an average of 22% for farmers last year, only 0.44% of the promised budget was spent on SFI, leaving farmers asking where the money is going. This year, the cuts are set to be even more substantial, with the government planning to slash payments by 36%.

Farmers at risk
This is contributing to a tough landscape for farmers, as Defra minister Mark Spencer explained, “It’s nearly impossible to make money from farming these days. We have been told by the government that to survive we must diversify. And now local government is saying we can’t. That has to be addressed, and soon, so that councils are encouraged or even ordered to cut farmers some slack.”

In fact, controversial TV personality turned farmer Jeremy Clarkson has suggested that the government should double the price of food in an order to help out the nation’s farmers, describing the reality for farms like his Diddly Squat enterprise as a “nightmare” as prices rise and costs stack up.

Speaking to the Express, he made the call that food needs to be more expensive to bring home the realities of eating habits to people, as he argued, “Food is far too cheap. I know you can’t say that, but it’s far too cheap. If the government said, ‘Right, we’re going to double the price of food,’ they’d be out of office within five minutes. But that’s what they’ve got to do, really.

“We don’t know what we’re supposed to be growing, or what fertilisers we’re supposed to be using. Fertiliser is now costing £1,000 a tonne rather than £200 like last year.

“So, in every area, it’s a nightmare. It’s not a disaster for me because I’ve got other ways of earning a living but if you haven’t – and 99.9 per cent of farmers don’t have another income stream – then a lot of them are simply not taking a wage.”

Reinvesting into sustainable farming
But according to Defra, the government is reinvesting money from the old payments into new schemes to shift to sustainable farming methods.

A Defra spokesperson explained, “As direct payments are phased out, we are reinvesting the full £2.4bn into the farming sector each year throughout this parliament, through SFI, our other environmental land management schemes, and one-off grants. A small degree of underspend in 2021/22 has been made available for schemes in 2022/23.

“We are now accelerating and expanding our payment offer so that there’s something on offer for every farmer. We launched the Sustainable Farming Incentive in 2022 – more than 2,000 farmers are already part of the scheme and we expect this number to continue to rise over the coming months.”

In order to help farmers, Vicki Hird, head of the sustainable farming campaign at Sustain, told Speciality Food, “The future of sustainable farming lies in the hands of both government financial support for public goods like nature, soils and carbon storage and a fair market also regulated and incentivised to support it. 

“The basic payment cuts were signalled some years ago and all the money must now be freed up to pay for the new England environmental and other schemes as the government has promised and we must keep them to that promise. 

“As they have brought forward six new schemes farmers can access this year, opened a new round of Landscape scheme and increased payment rates it is possible that this year will have a huge surge of action, accessing the funds, helping to reduce input costs and delivering the nature, climate and wider transformations we need for food, farmers and society.But we need new fair dealing regulations so retailers and other buyers treat farmers and growers fairly.”

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