How the UK government’s announcement at the OFC affects ELMs

The Farming Minister’s announcements at last week’s Oxford Farming Conference have generated much discussion. The simplified headline from Mark Spencer is that more money has been made available for those participating in Countryside Stewardship, the Sustainable Farming Incentive and woodland creation schemes - but how are payments broken down? This blog provides a breakdown of the announcements and what they mean for CLA members.

Capital grants

The long overdue review of the payment rates for capital grants is very welcome, and something the CLA has been pushing for several years. Defra has published a list of the 118 items which have been reviewed, with 89 items benefitting from increases, whilst 8 have stayed the same and 21 have their payment rate reduced. The rate of increase or decrease varies for each item, though payment rates have on average gone up by 48%.

Whilst the news has been welcomed, the announcement has generated confusion regarding how or if the new rates would be paid to those with agreements which started before 5th January 2023. As things stand, we are awaiting clarification from Defra.

Revenue payments

The Minister also announced that the annual CS revenue payments had been reviewed, effective from 1st January 2023. Defra has published a list of the 131 revenue options, with 112 options having an increased rate applied, whilst 19 options have stayed the same. As was the case in January 2022, those in existing agreements will benefit from increased rates. This is the second consecutive year where the annual revenue payments have been reviewed, and the news has been well received. The increases are sure to reinforce the appeal of the scheme for existing participants and may serve to generate new applications in 2023.

The management payment

In an effort to boost interest in the Sustainable Farming Incentive, the Minister announced that those participating in the SFI will benefit from a management payment of £20/ha for the first 50 hectares, capped at £1,000/ year. This does not apply to moorland SFI standard, which already includes an additional payment of £265 per agreement. The specifics of how the management payment will be paid are to be confirmed, though we understand those already participating in the scheme will benefit. With SFI application numbers lower than expected, it is hoped that the management payment will stimulate new interest.

The Minister also announced that the capital and annual maintenance payments for the England Woodland Creation Offer (EWCO) would also see an increase on average this year. Again, details of the revised capital and revenue payment rates have been published, with the annual maintenance payment increasing from £300/ha for ten years, to £350/ha for ten years. The revised rate will be applied to all payments made from 2023 onwards.

Of the 18 capital items, the rates have been increased for nine, have remained the same for six and have reduced for three items. The cap for the capital works has been increased from £8,500/ha to £10,200/ ha. The revised rates will be applied to all claims submitted from 1st November 2022.

There have been no changes to the payment rates for additional contributions.

The EWCO payment rate increases are something that the CLA has been pushing for, particularly as ECWO payment rates were left out of the Countryside Stewardship revenue rate review from 2022. The revised rates will increase the viability of woodland creation projects on suitable land.