English farmers to be paid up to £100,000 to retire

Farmers wishing to leave agriculture will be offered a lump sum of up to £100,000 next year under plans set out by ministers as part of England’s move to a post-Brexit subsidy system.

Cash that would otherwise have been paid out annually under the EU-style system known as “basic payments”, based on land value, will instead be handed over as a single sum under the plans, which are subject to consultation.

George Eustice, environment secretary, said: “The generational nature of farming . . . means that a younger generation often feels a great sense of duty to carry on the family tradition, but that might not be right for all.

“What of those who feel pride in what their family have achieved but actually yearn to pursue a different career? Or what of those who would like to do something different for a while, but maybe return to the family farm in later life?”

Eustice told a conference earlier this year that some older farmers were “standing in the way of change”.

Farmers would receive the payments if they rent out, sell or give away land they own, or if they surrender a tenancy. The scheme also aims to free up land for those seeking to enter farming, Eustice said.

The plans have been unveiled as the government winds down the EU-style basic payments system, which awards payments based on the area of land farmed.

Retiring farmers who opt to take the lump sum would no longer be eligible for annual subsidies.

The lump sums would be calculated based on the annual figure farmers would have otherwise received from the EU subsidy scheme before it was tapered, multiplied by 2.35. That would result in a payment of just over £50,000 for the average farmer, according to figures set out in the consultation. Payments would be capped at £100,000.

Ministers are also proposing to stop requiring farmers to actually farm their land to secure EU-style payments from 2024 until that subsidy scheme ends in 2027, while they gradually build up an alternative payments system based on environmental work. 

“The introduction of delinked payments should also help to further speed up restructuring of the farming industry,” said the Department of Environment, Food and Rural Affairs. 

“As payments will no longer be based on land area, each recipient will be free to make decisions which are right for their business and their own circumstances. Some may decide to downsize or leave farming altogether. This could create further opportunities for businesses to expand or diversify and for new entrants to join the industry.”

The department said its own survey had found that 12 per cent of farmers wanted to leave within five years.

The Landworkers’ Alliance, a group of smaller farmers, said it was concerned that the sums involved would not be large enough to tempt retiring farmers to take part.

“Based on similar schemes in Ireland and Australia, they are not popular with farmers due to their insufficiency in supporting farmers to leave the sector,” the group said.

The National Farmers’ Union said it would consult with members to find out their view of the proposals, but added: “Any discussion around people exiting the industry must be coupled with how we attract new people into agriculture.”

Farmers will need clarity on the tax treatment of the lump sums, added the Country Land & Business Association, which represents landowners.