The government’s shock closure of its Sustainable Farming Incentive subsidy scheme has erased all trust in Defra, key industry figures have argued, in a mounting backlash.
Defra last week announced the SFI – a replacement for EU Common Agriculture Policy subsidies – would be closed due to the “record number” of signups, with “every penny” of its £1.05 billion budget having now been allocated.
The short-notice move prompted outrage from bodies such as the NFU and the Soil Association, which warned it could “seriously risk the viability of the organic sector and the supply of sustainable British food”.
After an urgent meeting of key farming stakeholders on the issue with farming minister Daniel Zeichner on Monday, the NFU said the closure of SFI “undermines the ability of farm businesses to deliver environmental work”.
Added to ongoing anger over the government’s changes to inheritance tax liabilities for farm businesses, this “devastating shock” threatened the livelihoods of numerous farmers, especially upland farmers, commoners and tenants, said NFU president Tom Bradshaw, who added it had “crushed all trust” in the government department.
In the wake of the meeting with Zeichner, Bradshaw called on Defra, “for the sake of our domestic food producing businesses” to provide “urgent clarity on the future of SFI” and ensure “those farmers who feel abandoned, the people that have started applications and done the work, are able to enter into agreements”.
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While Defra has promised to pay out cash to farms that were in the process of applying for the scheme, many experts have suggested thousands of farmers with applications in the works that were not already in the system will not be accepted on to the scheme.
Midlands-based agricultural adviser Rob Browne said he had 25 ongoing applications for clients, “including six I was ready to press send on, ranging from £7,000 to £45,000 per year”.
Had he have been given 24 hours’ notice, “let alone the six weeks [notice to any changes to the scheme that] government [had initially] promised, I could have submitted them”.
Financial ‘cliff-edge’ for farmers who missed out
Instead, that funding “vanished overnight, leaving many facing a financial cliff-edge”, he warned.
“Now, I’m being inundated with panicked phone calls from farmers worried about the impact on their business resilience,” he added.
“These applications take time to put together and were prepared in good faith. As an adviser, my job is to help businesses grow and stay profitable. But with no real alternative funding schemes to plug the gap, and a government that keeps moving the goal posts, that’s becoming increasingly impossible.”
Former environment secretary George Eustice told The Grocer the move to close SFI so abruptly pointed to an “unwillingness” by the Treasury to support multi-annual farming support agreements of three to five years, which would have stretched into the government’s next spending review period.
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The sharp reductions in the former CAP-based direct payments in Chancellor Rachel Reeves’ Budget created “considerable headroom in the budget even for a substantial jump in applications for the SFI”, so it was difficult to avoid the impression the issue was less about this year’s budget and more about future government spending plans, he added.
“The SFI was designed to have minimum prescription and to reward farmers quite generously for embracing sustainable practices that improve soil health, water quality and would support nature’s recovery,” Eustice said.
“We will not deliver our legally-binding species abundance target without a broad scheme like the SFI changing practices across most of the farmed landscape.”
Talk by Defra of ‘targeting’ in any future SFI scheme also suggested “a lower budget and a retreat to tinkering in protected sites rather than landscape-scale change that moves the dial”, Eustice suggested.
“Previous attempts at trying to target agri-environment schemes through a point scoring system were a dismal failure. The lessons of past failures inspired by Treasury economists need to be heeded.”
Defra said proposals for a new SFI scheme would be presented in the summer.
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