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    Defra's Lump Sum Exit Scheme: A Missed Opportunity to Support New Entrants

    Defra’s Lump Sum Exit Scheme: A Missed Opportunity to Support New Entrants
    28/04/2022 Yali Banton Heath

    Holly Tomlinson, LWA New Entrants Policy Coordinator

    As we await the promised New Entrant Support Scheme (NESS) for England, Defra are already missing opportunities to support new entrants through the design of their Lump Sum Exit Scheme for those leaving farming, and the delinking of agricultural payments from land and farming.  

    One of the justifications for the Lump Sum Scheme is that it will free up land for new entrants.  However, despite repeated calls from the Landworkers’ Alliance and others to make the payment conditional on the landowner opening up access to their land for new entrants, no such conditionality has been put in place.  Certain requirements are also lacking with respect to environmental condition or even a guarantee that land needs to remain in agricultural use.  At a time when we are facing climate and ecological crises and growing concerns about food security, this lack of conditionality in return for public money is irresponsible to say the least.  

    There is no evidence to suggest that paying farmers to leave farming in itself makes land available to new entrants. Indeed, a similar exit scheme in Ireland had questionable results.  In the absence of conditionality or evidence, Defra appear to be relying on the good will of landowners and a handful of innovative share-farming schemes, as evidence that land sold will somehow end up supporting new entrants. 

    Furthermore, as highlighted by Sustain and LWA,  provisions such as allowing the Lump Sum recipients to take the land back after a 5 year tenancy and retain buildings meaning that land will be sold without essential infrastructure and housing, shows this scheme lacks a holistic understanding of what is actually needed to start a farming business.  

    Whilst those leaving agriculture can receive significant sums of money with almost no strings attached, the Government are far less generous to those struggling to start a career in farming.  In addition to missed opportunities, comparisons between the lump sum and the proposed NESS show an enormous disparity between the Government’s treatment of those  leaving the industry and those starting out.  Whereas up to £100,000 can be claimed under the Lump Sum scheme and whilst we await the figures for the NESS, early indications suggest that it is unlikely to be anything close. 

    Defra argue that the Lump Sum is not new money since it would otherwise be claimed as “delinked payments” over the next seven years.  However, the delinking of agricultural payments is in itself problematic. Delinking means environmental or active farmer requirements will no longer apply and recipients are essentially receiving public money for little more than a historic entitlement to land.  

    At a time when public finances are already stretched, the agricultural budget would be far better spent supporting the next generation to produce food in environmentally sustainable ways.  Yet, while the latest New Entrant Support Scheme proposals of piloting business advice to new entrants may be helpful to some, it will do nothing to tackle the financial and structural barriers new entrants face; chief of which is access to land.   

    Defra claims the scheme will be building entrepreneurial capability and creating opportunities for [new entrants] to compete effectively for access to land and finance”.  However, when competing for land with large existing farms, industrial or housing developments and lucrative carbon markets, even the best business pitch is unlikely to compete.  

    Land of course is limited and it is not enough to make those seeking it for food production better entrepreneurs. Ensuring new entrants have a real chance at entering the sector requires tangible measures to ensure the amount of land available to them is increased.  Defra had the opportunity to do this with Delinked and Lump Sum payment conditionality; and as we outlined two years ago, this could have facilitated new innovative and sustainable farm businesses; but the Government chose not to do this.  

    We also recognise that for tenant farmers, it make no sense to attach conditionality to the payment, since they have no control over future use of their land.  However, those who own their land do have this control.  Furthermore, whilst for tenant farmers the Lump Sum payment could be their only source of capital to rely on for their retirement, landowners will be receiving the Lump Sum in addition to any money they make from leasing or selling their land.  

    A recent report by the Campaign to Protect Rural England (CPRE) finds that land values in England have increased by over 250% in the last 20 years.  Of course, whilst this benefits land owners, including those seeking to take advantage of the Lump Sum, it makes land access even harder for new entrants.  

    Despite their willingness to fund the Lump Sum and Delinked payments without evidence of the benefits it claims, Defra insists that the NESS must first be piloted with just a handful of recipients.  However, there have already been numerous pilots in supporting new entrants through initiatives such as land matching, share farming, new entrant grants, farm start networks and we know what is needed.  It requires a comprehensive programme including facilitating access to land, capital grants and/or patient loans, training (both practical and business), mentoring and support for resilient local food systems.  

    Instead of the comprehensive programme of public support needed, new entrants will merely be trained in how to sell themselves as ‘worthy of private investment’.  As those at the end of their career receive unconditional public money, was it too much to expect our Government to also value those starting out? 

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