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BPS payments brought forward to help farmers with cashflow

Agriculture
Caroline Peters
17/05/2022
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On Friday 6 May, the government announced that Direct Payments in England will be paid in two instalments each year for the remainder of the agricultural transition period.

Under these plans, farmers with eligible applications will receive the first payment of 50% from the end of July, and the second from December.

This announcement forms part of a wider government strategy not only to help farmers with their cashflow, but also to provide ongoing support with cost pressures caused by rising demand and global instability.

Agricultural commodities are closely linked with global gas prices, which means farmers face rising costs for a wealth of inputs that include feed, fuel, and manufactured fertiliser.

Worldwide demand for gas had already increased as the global economy began its post-Covid recovery.  By February its price had quadrupled on the previous year, since increasing further due to the instability caused by Russia’s invasion of Ukraine.

Announcing the plans, the Environment Secretary George Eustice confirmed that the payments were intended as an “advance injection of cash to farm businesses” that would help to provide stability and confidence in the face of short-term pressures, allowing farmers to buy their inputs as usual.

Mr. Eustice added that the plans would represent a permanent change to the way BPS is paid in future, “with twice-yearly instalments going forward”. 

Rural Payments Agency chief executive Paul Caldwell welcomed the announcement, commenting that the advance payments would be “a welcome boost to cash flow for many farm businesses during uncertain times, (also) bring(ing) Direct Payments in line with what will be a more regular payment system under the new environment land management schemes”.

The plans build on a package of supportive measures for farmers that were announced in March.  These include a delay to changes to the use of urea fertiliser, improved statutory guidance on the Farming Rules for Water, slurry investment grants, and details about the Sustainable Farming Incentive, which will reward farmers for manufacturing more organic-based fertiliser products.

If you require any further advice as to how this will help your cash flow, please contact our Agriculture specialist team.

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