Farming & Rural Development

“Our Agri Environment approach is not sustainable, what happens when the money runs out?  If you don’t provide the economic hooks, linking products to the environment then it will all unravel unless we have legislation “creep” taking over.“

I wrote this exactly 20 years ago in 2005 as one of the conclusions of my Nuffield Farming Scholarships Trust report. That was the same year that Entry Level Stewardship (ELS) was launched. After a slow start it became phenomenally successful with around 52,000 farmers participating and 72% of English farmland participating in an agreement. But the budget was pulled in 2015 and many farmers who had started down that journey felt betrayed. 10 years later we are in a similar position with the Sustainable Farming Incentive (SFI) being halted due to budget pressures, with no new agreements due to start until 2026. This is an appalling message and situation to be in. Yet again, farmers have been led up a path and dumped, having changed farming systems and businesses to embrace a direction of travel repeatedly sold to them as the future.

Why are we in this situation? I don’t like to do blame but we need to learn lessons from this. It’s easy for the current government to blame the last government for mismanagement of the farming budget. Or even easier to blame the current government for yet another attack on farmers. But it's a more complex picture than that, where lessons learned from the past have not been listened to; years of experience of farm advisers from MAFF and Defra delivery body staff ignored; the consequences of lobbying positions of farm unions have not been thought through and the revolving Whitehall door of Defra policy officials has resulted in naïve decisions being taken despite advice to the contrary.

For those with good memories one of the reasons ELS was pulled was because farming unions refused to modulate Single Farm Payment (BPS) monies to fund it and it became unaffordable. With all BPS monies soon to be “modulated” to environmental land management (ELM) schemes that cannot be the case now? No, the current situation was inevitable, predominantly due to very poor senior civil servant decisions and ill thought through farming industry positioning and lobbying.

When originally launched, ELM was announced as having a 30:30:30 split across SFI, Countryside Stewardship and Landscape Recovery. NFU howled in protest at this, trying to secure the majority of the budget into SFI type actions, more or less as a direct equitable replacement for BPS, failing to recognise that there was a necessity for significant higher tier type interventions to deliver environmental gains in those areas where there was greater opportunity. That was one mistake. SFI was never going to deliver the heavy lifting necessary to secure the environmental delivery required to halt or reverse biodiversity decline. Mistake number two was DEFRA listening to this, not only backtracking on the announced split, but failing to have any underlying finance model, as pointed out repeatedly to them by experienced Natural England, Forestry Commission and Environment Agency advisers, a point subsequently picked up by major programme reviews of the ELM program and repeatedly emphasised by Environmental NGO’s.

Defra repeatedly announced an ambition to have 70% of farmers and 70% of farmland in SFI. My own simple modelling way back in 2021 showed that if that was to be the case then transferring the entire BPS budget to ELM and sticking with the original financial split, would have equated to an average SFI payment of £80/ha across all farmland. But, desperate to alleviate the political kick-back to the pain of BPS reductions Defra then put most of its policy and IT effort into designing an SFI scheme which was financially uncapped, both at option level but also at national level. Caps on capital expenditure were also removed, to the horror of Defra’s own delivery bodies, as they knew that would rapidly blow budgets.

Defra were well advised that SFI options with no hectarage limit, paying in excess of £500/ha which could be implemented singly (as opposed to via “bundles” of synergistic options as previously delivered in the Mid-Tier wildlife options approach ) would lead to farmers and agents “gaming the system “. And, who can blame them, many did, with whole farms put down to high paying single options delivering little environmental gain, yet utilising massive amounts of budget, an uncapped budget. This was predicted and pointed out to Defra policy by its own delivery bodies but was shooed away as a problem “to worry about if it happens”. It did happen, quite quickly, and adjustments had to be made, denting farmer confidence in the early stages of SFI. Experienced advisers made it clear to Defra policy officials that you cannot turn the tap on and off with such schemes. Farms are long-term businesses with long rotations, complex stocking plans and underpinning capital requirements, to say nothing about the change in mind-set needed to embrace such schemes and the lack of trust that would ensue should the tap be turned off in the future. Unfortunately, policy officials had very short-term horizons and were eager to appease political masters, as opposed to sagely advising on the longer-term consequences of such an approach. So, this advice was ignored and the results are now materialising. Had the original proposed split for ELM been adhered to, or even a revised finance model agreed and an SFI scheme designed to operate within that, we would not be where we are today.

Today’s announcement has many consequences. It will massively dent farmer confidence in changing their systems to be more sustainable and will inevitably push many back to max input, max output systems. It’s another straw on the back of an industry feeling unloved, unwanted and unsupported at a time when it has so much to offer to solve food security and biodiversity challenges, an industry that is rapidly losing trust in government, making it harder to move forward in the future.

It’s also an announcement that has me feeling very sorry for Defra’s own delivery bodies who repeatedly advised Defra against many of the actions they have taken, which have resulted in where we are now. These same delivery bodies, with brilliant and dedicated technical staff, many of whom have worked on the front-line advising farmers and building trusted relationships for decades, will now be in the firing line for farmer angst as they roll down farm drives, being seen as part of the problem.

It’s also an announcement that farming unions should reflect on, recognising that their call for simple and easy schemes available equitably for all, as a BPS replacement, was never going to square with a limited budget and deliver the required environmental enhancements needed.

And it’s an announcement that should have Defra policy officials reflecting on the fact that they have very experienced delivery body staff, who have worked with farmers for decades, with institutional memories going back to the first Agri-environment schemes of the 1990’s and all of the lessons learned from delivering them, and that they should listen to them now, and in the future, so that wheels are not reinvented and that avoidable, deleterious consequences for farmers, the natural environment and their department’s reputations are avoided.

The only praise I can offer to Defra, or its ministerial team, is that they are now appear to be waking up to these issues and are hopefully pressing the pause button so that they can reset ELM, set expectations accordingly, manage the budget and get it delivering for what it is intended, the natural environment.