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    Lump Sum Payments in the Ag Bill

    A Golden Parachute for Retiring Farmers or Unjust Reinforcement of Current Land-holding Patterns?

    Lump sum payments in the Ag Bill: A Golden Parachute for Retiring Farmers or Unjust Reinforcement of Current Land-holding Patterns?
    24/02/2020 Steph Wetherell
    In Blog, News

    In this blog, Horticulture Campaign Coordinator Rebecca Laughton explores one part of the new Agriculture Bill and explains why the lump sum transition payments should be made conditional.

    While Landworkers’ Alliance broadly welcomes many aspects of the new Agriculture Bill, one aspect which remains problematic is the matter of delinked transition payments and the lump sum [1] (para 12 and 13, pages 9-11).  We recognise that this mechanism is valuable to enable some farmers to transition their farms from the Basic Payment Scheme (BPS) system of farm payments to one based on the new public money for public goods/Environmental Land Management (ELM) system, and fully support such farmers adapting their businesses to the new system.  Our concern centres on the availability of payments for those leaving agriculture altogether, and the lack of a mechanism to ensure that land freed up as a result is made available to new entrants.

    Our vision for the future of UK farming involves an increase, rather than a decrease, in the number of people working in agriculture, horticulture and other land based occupations.  The agroecological  land management we promote involves integration of food, fuel and fibre production with the protection of natural resources and the environment. Such integration involves the thoughtful and intelligent deployment of more, rather than less, farmers and growers, whose work tends to be more varied and less mechanised due to the diversity of systems involved.

    The current area based payments system has exacerbated the concentration of land and raised the price of land, creating a significant barrier to new entrants to farming.  The meteoric rise in the price of UK farmland from £2,400 to over £7,000 per acre coincides with the introduction of the area based payment scheme [2].   The delinking and lump sum mechanisms further stack the system against new entrants who are excluded from both access to land and entitlement to payments, while those wishing to leave the industry are being offered a lump sum of public money with “no strings attached”.  Hence, large-scale land owners who have benefited financially from the previous system, have the potential to “cash in” their entitlements, stop farming and adopt a minimum intervention approach to land management (aka rewilding) and their land is potentially lost to agriculture.  They would then be able to claim further ELMs payments on the same land for managing their land for the delivery of public goods. Already, the use of land as “a tax efficient way to transfer wealth between generations” due to working farmers’ ability to apply “Entrepreneur’s Relief” on Capital Gains Tax, meant that land in 2017, only 40% of farms put on the market were sold to farmers[3]. The lump sum payment of transition entitlements could further exacerbate this loss of farmland to farmers.

    For those with BPS entitlements wishing to leave agriculture and claim their lump sum of payments, we propose that there should be conditions attached, committing them to make their land available to new entrants or a community farming business.  Such a condition could potentially make land accessible to a new generation of active farmers who have previously been excluded from the sector.  In combination with a programme of capital grants or interest free loans for new entrants for equipment and infrastructure, creating such a mechanism to encourage the transfer of land could kick-start an exciting agricultural renaissance.

    To illustrate the kind of possibilities a conditional lump sum payment could open up, here are a couple of examples.  Firstly, a mixed farmer wishing to retire, but unwilling to sell the family farm, could access the transition lump sum by making their farm available to new entrants on a long-term (eg 10-20 year) lease.  It would thus become possible for both the land and the farm buildings to be rented by one or more new entrants.  A combination of complementary businesses including an organic market garden, using five acres of the land and part of a barn as a packing shed; a grower of heritage grains, and a young couple starting a free range egg business, might take on farm business tenancies.  The enterprises could benefit each other through making use of arable land during the fertility building phase by grazing it with hens, who would add their manure, and the hens could be partially fed on grain cleanings or vegetable waste.  Farmers already leasing land to new entrants report a sense of vitality and optimism coming to the farm from the youthful energy and activity that the new entrants bring.

    Another possibility might be a landowner with young children holding an entailed estate, but with little interest in farming.  A condition on the lump sum transition payment might encourage such a landowner to make some of the estate available to a mixed community supported agriculture (CSA) scheme and a livestock farmer needing grazing and winter housing for their sheep and cattle.  The land would remain within the ownership of the family, but for 15-20 years, until the next generation are old enough to decide whether to go into farming, it would become the home of a CSA scheme. Thus it would provide fruit and vegetables, eggs, meat and maybe even dairy products for the local community while generating jobs and a stronger connection between members of the CSA and the estate land.

    As it currently stands, farmers and landowners such as those cited above would be under no obligation to make their land available to anyone.  What Defra intends to happen with such land is unclear.  While some might be rewilded, it would be inappropriate for higher grade agricultural land to be taken out of production. The Landworkers’ Alliance firmly believes that environmental public goods and food production can be integrated through agroecological management, and that it is necessary that the UK builds its capacity to produce its own food, rather than “exporting” the negative externalities of industrial food production to far off lands. Ultimately, we all share the same planet and the impacts of environmentally damaging agriculture will have impacts on the UK either in eventual food shortages, climate change or the arrival of refugees whose own agricultural land has been degraded.

    If the innovation and energy of a new generation of farmers, growers and woodland workers is to be harnessed, it is essential that the new Agriculture Bill facilitates land from retiring farmers being handed on to those who need it.  As currently proposed the lump sum payment fossilises the unequal distribution of resources.

    For more info, contact Rebecca Laughton on rebecca@landworkersalliance.org.uk

    [1]    Agriculture Bill 2020 (16th January 2020), paragraphs 12 and 13, pages 9-11. https://publications.parliament.uk/pa/bills/cbill/58-01/0007/20007.pdf

    [2]    EFRA (2013) The Common Agricultural Policy after 2013. UK Parliament Environment, Food and Rural Affairs Select Committee report: https://www.publications.parliament.uk/pa/cm201011/cmselect/cmenvfru/671/67104.htm

    [3]    Monbiot, G., Grey, R., Kenny, T., Macfarlane, L., Powell-Smith A., Shrubsole, G. and Stratford, B (2019). Land for the Many:  Changing the way our fundamental asset is used, owned and governed. Labour Land Paper, p28.

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