Defra's lump sum exit scheme and delinked payments consultation: What you need to know

A picture of a farmer in a cow shed looking at a laptop

The government consultation on the administration of direct payments and a lump sum exit payment for farmers who may be looking to leave the industry closed on 11 August 2021.

The NFU collated feedback from thousands of members in order to respond to Defra. Our response makes clear that the industry cannot accept a one size fits all approach.

The NFU's then Vice President Tom Bradshaw said:

The NFU has made its response clear. We need to see a domestic agriculture policy that gives farmers thinking of leaving the industry enough time and information to make those life changing decisions that affect their farming future.

“It is also crucial that those remaining in the industry are not unfairly disadvantaged and we allow farming and British food production to thrive for generations to come.

“Our own consultation reached 2,500 members and confirmed what we already know; that every farmer is unique.

“Their personal circumstances, land tenure and enterprises vary massively, so we cannot accept a one size fits all approach.

“For tenants there are added complications to meet with the legal requirements of giving notice to their landlords.

“Deciding to exit our industry is leaving a job like no other and deeply subjective to that person, which is why any future approach. whether it be lump sum or delinking. must be sensitive of this fact.”

Flexible approach needed

“It’s clear that many members are concerned about the loss of a family home, so we would urge a flexible approach to this, allowing those exiting the industry to keep their residential property or any non-farming related business. A flexible approach would reduce barriers for those wishing to exit the industry and still have the potential for income from non-farming activities. It goes without saying that as much as those leaving need support, so do those entering the industry. Emerging agricultural policies must work hand in hand and provide a base for all aspects of a successful farming business."

“It is also important to remember that agricultural and trade policy can’t be viewed in isolation. New trade deals, and their consequences, play a crucial role in the viability of family farms. We welcome participation in any future consultation and await a prompt response that we hope has taken into account our members’ concerns, giving them certainty of when the exit scheme will be open for applications.”

Key things you need to know about the consultation

1. Defra hopes to support farmers who want to leave the industry and make it easier for new entrants to join

Defra sees current direct payments as holding back structural change and inflating farm rent prices. It believes that by making it more financially viable for farmers to exit the industry, it will help increase opportunities for those who wish to enter into or expand their farming activity.

2. Direct payments will change from 2022 – this consultation will help shape the next step for farmers

As part of the transition to a new agriculture policy in England, the government wants to:

  • In 2022, offer farmers who wish to exit the industry the option of taking a lump sum payment in place of any further direct payments.
  • In 2024, ‘delink’ direct payments from the land for all farmers. This means that recipients will no longer have to farm the land to receive payments.

3. Defra consulted on questions that will determine eligibility

The consultation sought industry views on the following: 

  • The proposed lump sum exit scheme – Defra was seeking views on its questions about eligibility criteria and how it should calculate the value of the lump sum.
  • The reference period to be used to determine eligibility for delinked payments, and how it calculates the value of them.

4. The NFU worked to help members respond to the consultation

During the consultation period, we explained Defra’s proposals in detail, adding explanations to help our members understand what Defra is asking and to support them in feeding in their views. 

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