Future financial impact for farmers and landowners
Recent months have seen undivided government attention to the COVID-19 pandemic. Whilst this remains at the forefront of the country’s mind, there are important decisions being made for the agricultural industry in the form of the Agricultural Bill (The Bill), Environmental Land Management schemes (ELMs) and the Basic Payment Scheme (BPS). Whilst we wait for The Bill to be ironed out and for Brexit decisions to be made, what are the financial impacts on farming businesses?
In our recent press release, ‘Is the agricultural sector about to be thrown under the bus?’, Larking Gowen Partner Bruce Masson discusses The Bill and what this might mean for the sector. But what are the financial impacts for farmers and landowners?
From a high-level perspective, the tapering of the current payment system is due to be over a seven-year period commencing in 2021. However, given the current economic climate and pandemic crisis it is likely that there will be further debate in the House of Commons and amongst lobbyists, regarding the transition period start date, which could mean a delay to 2022. This received minor debate on 13 May, however no decision or vote was taken.
Given the levels of profitability in agriculture, this reduction in income over the period is likely to significantly impact the livelihoods and wellbeing of our farmers and landowners, with a higher dependence on diversified revenue streams.
We’ll look to discuss the tapering timeline of BPS payments and the future of ELMs in our next articles.
Now, more than ever, is the time for farmers and landowners to be considering a five to ten-year plan for their businesses for investment and cashflow.
Our advisors are always available to provide help and advice. Please contact your usual Larking Gowen contact or get in touch via email.
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