Large farms will bear the brunt of subsidy cuts next year under the government’s post-Brexit plans set out on Tuesday for overhauling billions of pounds of financial support for agriculture. Under a tiered system of reductions over seven years, farmers in England will face a 5 per cent cut next year to payments below £30,000, with stepped increases in the level of reductions on higher subsidies. This rises to a 25 per cent cut on any amount above £150,000 paid out to those with the largest farms. Under the planned phase-out of the EU direct subsidy system, based on land holdings, English farmers will instead be paid for environmental projects on their land. The scheme is out for consultation with pilot projects due to start next year. The radical changes to support for the rural economy will also include payouts for investments in technology, research and animal welfare, the government announced on Tuesday. Separate plans are being developed for Scotland, Wales and Northern Ireland. But farmers have called for a minimum of a year’s delay to the subsidy cuts until they have more information on how the UK’s future trading relationships with the EU and other countries will affect them.
Under the EU scheme, UK farmers received about £3bn a year in subsidies. The Treasury has promised additional funding to help maintain current subsidy levels during this parliament, but the National Audit Office last year warned that it had not left enough time to implement the new funding system. “It would be an absolute dereliction of duty . . . to allow us to go into a new regime of public money for public goods when we have no idea who we will be trading with. We need to pause,” said Minette Batters, president of the National Farmers Union. She said that the Treasury should bear the cost of maintaining existing payments for next year. “We should maintain the status quo until 2022 when we know the future trading relationship with the EU.” The government said the final payments under the EU subsidy regime would be made in 2027 under the proposed phase-out. The remaining payments under the existing so-called direct payments scheme would be “delinked” from farmland holdings, with the option of taking them as a lump sum. This would allows farmers to retire or change careers rather than stay in agriculture during the transition. This change could happen as soon as 2022. “This should facilitate restructuring, creating opportunities for existing businesses to expand and new entrants to join the industry,” the government said. Farmers have also expressed concern that the new regime, which replaces existing environmental payments, could see cuts in overall payouts as farming competes with other sectors after Brexit. The latest details were unveiled as farmers gathered in Birmingham for the annual NFU conference, with anxiety running high over post-Brexit concerns including food standards. Ministers have opted not to include food standards in the farm bill currently working its way through parliament. Farmers are concerned this means the government is planning to open the UK up to cheap produce from third countries, such as the US, which have lower standards than the UK. Products such as chlorinated chicken or hormone-treated beef made in the US would pose a competitive challenge to domestic producers. Ms Batters said in her opening speech: “To sign up to a trade deal which results in opening our ports, shelves and fridges to food which would be illegal to produce here would not only be morally bankrupt — it would be the work of the insane.” George Eustice, the newly appointed environment secretary, at the weekend said there was a “discussion to be had” on food standards, in contrast with his predecessor Theresa Villiers, who had promised legal protections. “We’ve got a clear position in this country that it is illegal to sell chlorine-washed chicken, illegal to sell beef treated with hormones. We’ve no plans to change those things,” Mr Eustice told Sky.