Cuts to post-Brexit farming payments mean farms risk “going out of business” as new figures reveal only a tiny fraction of a new scheme designed to replace lost subsidies went to agriculture businesses last year.
The government is replacing the EU’s Common Agricultural Policy (CAP), which paid subsidies to farmers to keep them in business, with “payments for public goods”, meaning land managers get paid for improving nature.
Each year, ministers are cutting how much farmers get paid under the old scheme while they introduce new ones, which last year commenced with the launch of the sustainable farming incentive (SFI). This paid farmers for looking after their soil.
While subsidies were cut by an average of 22% for farmers last year, the money paid out through the SFI equated to only 0.44% of the total funding plan for farmers, leaving farmers asking where the money is going. This year, the cuts are set to be even more stark, with the government planning to slash payments by 36%.
Data revealed to the Observer under the Freedom of Information Act from the Rural Payments Agency shows that a total of £10,692,415 was paid out under the sustainable farming incentive scheme in the 2022 calendar year. This is out of a budget of £2.4bn, meaning only 0.44% was spent on the new schemes.
Farmers have said they are noticing an underspend, with money missing from the rural community. Jake Fiennes, a conservationist who manages a large farm on the Holkham Estate, Norfolk, saw the farm’s subsidies cut by about 45% last year.
“In the last financial year, there was an underspend of about £100m. It looks like this is to be the case again. Our direct support has been reduced and we want to know where that money is going,” he said.
Dither and delay over introducing the new payment programme, including threats from the Liz Truss government that they would scrap it altogether, meant that many farmers have not signed up.
“These figures show that the Conservatives have broken their promise to farmers to keep farm funding at CAP levels,” said Tim Farron, the Liberal Democrat environment spokesperson. “They have rushed to cut basic payments and failed to deliver the new schemes on time.
“This will lead to farmers going out of business, which means that we will fail to deliver vital environmental goals.”
He added: “It’s hard to know if this is incompetence or deliberate betrayal of our rural communities, but they amount to the same thing.”
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A Defra spokesperson said: “As direct payments are phased out, we are reinvesting the full £2.4bn into the farming sector each year throughout this parliament, through SFI, our other environmental land management schemes, and one-off grants. A small degree of underspend in 2021/22 has been made available for schemes in 2022/23.
“We are now accelerating and expanding our payment offer so that there’s something on offer for every farmer. We launched the Sustainable Farming Incentive in 2022 – more than 2,000 farmers are already part of the scheme and we expect this number to continue to rise over the coming months.”