The Agricultural Transition Plan: NFU work continues

Published 29 September 2021

Farm business Agricultural Transition Plan

Over the summer, the NFU policy team has continued working for members on a range of new Defra schemes and initiatives. In the first of a two-part series our farm business expert and senior adviser Richard Wordsworth keeps us up to date.

Our work started with NFU staff and a group of NFU East Anglian members meeting Defra out on farm. However, throughout the summer, we've also been involved in various co-design webinars, workshops, and attending and inputting at regular Defra and RPA meetings.

It will be critical in the coming months to work policy and overarching designs into workable schemes, and we have been working to ensure this happens. We don't need to reinvent the wheel, just engineer out some of the issues of previous schemes wherever possible.

The Agricultural Transition Plan

The Agricultural Transition Plan (ATP) covers the agricultural transition period, which starts in 2021 and runs to 2027. Throughout this time Defra will reduce and eventually stop direct payments.

Defra plans to invest the money freed up by stopping direct payments and support agriculture in different ways, by allowing farmers and landowners to access new schemes.

Defra will, in the future, pay farmers to improve the environment, animal health and welfare and reduce carbon emissions.

The ATP sets out the changes Defra will make and what these will mean to farmers.

Look out for the new Farming Investment Fund

We expect this much-anticipated new farm-focused productivity scheme to be launched by the end of October.

Defra see there is potential for the industry to increase productivity in an environmentally sustainable way. This will allow industry to be profitable and sustainable without relying on direct payments.

Defra will provide grants to help invest in equipment, technology, and infrastructure that will both improve profitability and benefit the environment.

In terms of measures that will help develop productivity and resilience on farm in an environmentally sustainable way, Defra is launching two new capital grant schemes for applications commencing from this autumn of 2021. These schemes will provide grant support that could cover the following items:

  • on-farm water storage infrastructure, including reservoirs
  • precision agriculture equipment (low-emission and variable-rate nutrient or pesticide application)
  • robotic or innovative technology
  • items to improve animal health
  • specialist forestry equipment
  • equipment and technology for sorting, or processing products
  • large-scale precision agriculture projects.

The two new grant schemes

Small grants

The Farming Equipment and Technology Fund (FETF) will provide grants towards the purchase cost of a list of specified, pre-determined items that will have a standard cost for farmers, foresters and contractors to help improve farm performance.

Defra have been reviewing elements of the current approach, such as the list of eligible items and the range of grant funding available.

The new scheme will initially be based on the recently closed Countryside Productivity Small Grant scheme, and will have a similar application process.

Large grants

The Farming Transformation Fund (FTF) will provide grants towards the cost of more substantial or complicated investments in:

  • equipment
  • technology
  • sustainable water management
  • precision agriculture

All  of the above have the potential to transform business performance.

The grant will be based on the previous Countryside Productivity Large Grant scheme, which was structured around a number of themes.

There will be a two-stage application process.

First stage of the FTF application

The first stage is an initial online service which will check:

  • eligibility
  • how well projects fit with scheme priorities.

This process will guide applicants in preparation of their full applications.

Second stage of the FTF application

At the second stage, applications will be scored on their fit against Defra’s selection criteria before a decision on whether to award grant funding is made. This might include making more efficient use of water or using inputs more effectively.

Grants amounts will start above the range of the FEFT.

Defra will provide more information, including full eligibility guidance and how applications are assessed before the launch. The key to a successful claim will be to understand this information when it is published.

Our work

For more than a year now NFU staff and members have been working with Defra and the RPA to develop the FETF and FTF.

We have been feeding back on how the previous Rural Development Programme for England schemes have operated in recent years and suggested ways to improve both the scope and administrative aspects of the Countryside Productivity schemes that operated under the CAP.

We have also sought clarity around the relationship with the forthcoming Slurry Investment Scheme and Animal Health and Welfare Pathway activity within the ATP.

In terms of the FETF

Our work with the FETF scheme has been to try to ‘level up’ the eligible items available so that that they cover all sectors more evenly.

We have also asked for a review

  • in the minimum grant fund level (which had previously been set at £3,000)
  • the range of grant funding available,
  • intervention rate.

We have also questioned the need to claim all items applied for where the situation on farm has changed or items are not available to purchase.

We also know that the ability to order before grant funding has been confirmed was also needed, so have pushed for this too.

In terms of the FTF

Our work with the FTF meant that we fed into the scope and online service design of the fund and the invention rate. This will help with the administration of the future scheme.

We have also setup farmer feedback groups to develop the scope of the large grant scheme covering water resource management, innovation and technology.

We await the launch of this scheme and confirmation of the scheme rules.

Next steps for Direct Payments

Direct Payments are currently paid in the form of BPS.

There will be a change in the delivery model of direct payments.

In May, Defra published a consultation about their proposed lump sum exit scheme for farmers and approach to introducing delinked payments in 2024.

We consulted widely on this with members and had direct engagement with around 2,500 members. This helped develop our response. Our submission was made on the 4 August – read our Direct Payments to farmers: Lump sum exit scheme and delinked payments in England – NFU Response.

Since August the we have been following up the consultation with Defra officials around technical and operational issues. we have also put forward names of members who are looking at the lump sum exit payment so that Defra can understand the issues involved with this scheme.

Awaiting Defra's response

In terms of the next steps, Defra are expected to respond to the consultation by end of October.

It is expected that high level information will be released at that time.

We will carefully consider this information and continue to work with Defra and the Rural Payments Agency (RPA) on the delivery of changes that have been decided, such as the application processes and farmer guidance.

BPS payments

We have continued to monitor progress of BPS 2021 claims with an aim to ensure payments are delivered as promptly as possible. This is especially important for groups that have seen significant changes since 2020, such as former cross-border holdings and New Forest commoners. Our intention is that issues are resolved as they arise.

This follows NFU work on simplifications to the 2021 BPS scheme year including, prompt decision and release of information following the removal of greening rules.

More details on BPS 2021 can be found on our BPS pages.

Look out for the second part in the series Richard is writing on the work we are doing as we near the end of the membership year.

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