Ministers are reviewing plans for the rollout of England’s post-Brexit farm subsidy scheme as Liz Truss’s administration seeks ways to boost economic growth and retain the rural vote, people briefed on the situation said.
The rethink of the planned payments for environmental work, a big plank of the previous Conservative administrations’ post-Brexit agenda, follows concerns that the slow development of the scheme would put the financial viability of some farms at risk.
It also follows by-election defeats for the Tories in the seats of Tiverton and Honiton, in Devon, in June and in North Shropshire in 2021, both rural seats that swung from the Conservatives to the Liberal Democrats — a trend the party wants to stem before a general election due by January 2025.
Two people briefed on the matter said the government was reviewing plans to taper EU-style “basic payments” through to 2027, handed out based on the area of land farmed, with a view to offering further financial help to farmers.
It is also reviewing plans to introduce payments for environmental work such as tree planting and peatland restoration, first set out by then environment secretary Michael Gove in 2018, which remain at pilot stage.
“They’re looking at agricultural policy and they are clearly very interested in how they can do things differently,” one person said. Another person said there was “all to play for” and no final decision had been made, though a shift back towards payments based on land area was possible.
Farmers had lobbied for a slower transition, though a report in the Observer newspaper that the environmental scheme could be scrapped prompted anger among farmers advising or taking part in the pilot. Others said they were concerned that payments based purely on land area rather than “public goods” would be vulnerable to cuts under future governments.
The National Trust said scrapping environmental payments would “squander one of the biggest Brexit opportunities for nature, fatally undermining improvements to the nature, soil and water upon which sustainable food production depends”.
A government source dismissed the reports as “speculation” while the Department for Environment, Food and Rural Affairs did not immediately respond with comment.
Minette Batters, president of the National Farmers’ Union, said: “We welcome the government plans to review the frameworks for farming regulation, innovation and investment, to help ensure farm businesses are not only supported through the current economic challenges, but are able to make progressive decisions to boost growth and farming’s contribution to the nation.
“In order for these frameworks to succeed, for both food production and the environment, they must be developed in partnership with farmers.”
The Environment, Food and Rural Affairs Committee of the House of Commons warned in January that a lack of information about the new scheme posed a risk to farm businesses and said Defra had conceded that “its confidence in the scheme looks like blind optimism”.
“The department has given no detail about how either the necessary productivity increases or environmental benefits will be brought about, nor how these will offset the scheme’s dramatic effect on English farmers, who will see their income from direct payments reduce by more than half by 2024-25,” the committee said.
The review comes after chancellor Kwasi Kwarteng’s Friday mini-Budget set out plans to relax planning rules in low-regulation “investment zones”, though he insisted on Friday that “we’re not going to relax environmental rules” after an outcry from conservation groups.
Additional reporting by Jim Pickard