IN A bid to breathe new life into the farming industry in the South West, the government has announced plans to introduce a ‘retirement scheme’ as part of its proposed reforms to agricultural support in England.
Farmers currently receive direct payments under the Basic Payment Scheme (BPS) which are paid on a flat rate per acre basis.
However, this will be phased out by 2027 and replaced by a number of schemes designed to encourage more environmentally friendly farming.
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The proposed retirement scheme would give participating farmers in the South West a lump sum payment in 2022, amounting to roughly the same amount they would have received through BPS between 2022 and 2027.
David Hebditch, partner in consultancy firm Carter Jonas, said: “In a post-Brexit world, the government’s intention is to help to modernise the agricultural industry to increase productivity through technological advancement and modernisation whilst encouraging succession planning and retirement to ensure that younger ‘progressive’ farmers in the South West are in occupation and control of the land.
“The average age of farmers is around 60 and a major hurdle to succession planning is a lack of retirement provision and housing, particularly for tenant farmers.
“This is an all-or-nothing scheme with a commitment to leave the industry, preventing partial or phased retirement.”
To be eligible, the farmer must have claimed BPS payments in 2015. The lump sum will be based on the average BPS payments received from 2018-2020.
The amount paid will more than double (2.35x) the reference amount and will be capped at £100,000.
The retiring farmer must then sell or rent out at least 95 per cent of his land; if renting, the land must be rented out for a minimum period of five years.
Mr Hebditch said the move probably wouldn't suit everyone.
“The principle behind the scheme is right, providing the farmer receives an adequate net sum," he said.
“Sole traders in the South West who are approaching retirement age and should be considering their future and making succession plans stand to benefit the most.
“But it probably won’t suit those businesses with complicated structures – it would be a more complex process for those with multiple partners or directors, as each decision affects more than one person.”
Defra is currently consulting on these proposals and farmers in the South West are encouraged to share their views before the deadline of August 19.
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