Payment by results: Piloting a revolution in agri-environment schemes

Myself and CLA colleagues are standing in a drizzly field outside of Diss, Norfolk, surrounded on one side by a glorious pollen and nectar mix and on the other the heavy, sagging seed heads of a wild bird mix. We’ve been invited by Natural England’s Head of Agriculture to visit one of the most exciting environmental projects currently happening in the UK – results based agri-environment payment schemes.

Agri-environmental schemes, which reward farmers for undertaking environmental works, have long been supported and used by CLA members but, especially in recent, years frustrations have emerged around a lack of flexibility and the scale of administration. Results Based Payment (RBP) has the potential to address those concerns.

RBPs are used across Europe but with the exception of a brief pilot in the 1980s, have not been used in the UK. Instead our world leading agri-environment schemes have been based on an ever-increasing set of management prescriptions which say what farmers can and can’t do. Prescription based schemes are effective but there are unintended side effects and it is possible, but not yet proven, that RBPs could fix some of these.

Proponents of RBPs say they will lead to a system of agri-environment schemes that increase the incentive to deliver environmental outcomes, require less administration as there is no need to check compliance with a defined list of actions and that they engage with and benefit from the expertise of farmers on the ground who are empowered to do what they think is best.

The CLA Environment Committee has previously debated RBPs and whilst recognising the potential benefits, it was cautioned that they increased the financial risk of engaging in agri-environmental schemes whilst potentially complicating administration. A CLA explainer on results based payment goes into these issues in more detail.

Natural England wanted to test these ideas and in 2015 applied for European Union funding to run a pilot scheme as part of a larger EU project on this topic. As well as the work in Norfolk, the Yorkshire Dales National Park are leading on an upland grass land pilot.

Early indications from the pilot programme are that there are benefits to farmers and tax payers but that a result based approach is not appropriate in every context and will probably only be suitable for some options. 

The study is already highlighting some interesting issues; in particular the quality of available seed and the lack of agronomical expertise related to environmental delivery. When you are being paid to deliver, as with agricultural production, you need access to high quality inputs and advisers; it’s questionable whether these currently exist. Natural England are also considering technical issues like how many different payment rates do you need and what advice and support do farmers need to meet the higher end of environmental delivery.

Senior policy makers in England and Wales are interested in results based payment as part of post-EU exit agri-environment schemes. Having seen it in the ground I remain cautiously positive – there are benefits for the environment and for farmers who are freed from having to check every time they want to run field operations or undertake management. But any such scheme needs to be piloted further to identify and iron out the challenges. We also need to consider providing advice to farmers whose enthusiasm exceeds their ecological expertise.

If the hope of policy makers is that environmental outcomes will be given the same level of management consideration and care as agricultural products then support and incentives need to be provided.

How the scheme is designed and delivered, how it fits into other policies and how big the incentives are will determine whether members benefit from this approach in the future. You can be sure, come rain or shine, the CLA will be watching this area closely.