Business Clinic: Should I leave HLS for Countryside Stewardship?

Farmers Weekly’s Business Clinic experts offer free advice on legal, finance, tax, insurance, farm management and land issues.

Here Stuart Nicholls agribusiness consultant with Savills – offers guidance on how to weigh up whether to switch from an HLS to a CSS agreement.

I am in an HLS scheme, but am wondering whether I am better off entering the new Countryside Stewardship scheme (CS). What are my options?

It is not possible to transfer an existing ELS scheme into the new CS, but you can transfer an HLS agreement into a new CS deal.  This may have its attractions on paper, but may not be practical either financially or in terms of management.      

Stuart Nicholls, agribusiness consultant, Savills

Before proceeding with any new scheme, review the current options you have signed up to. Entering a new CS agreement will allow you to choose a range of options and remove any that have not worked well under your HLS scheme.

However, if you transfer before the HLS has expired, you must have like-for-like options in place.     

See also: How contract farming agreements work for livestock enterprises

Next, assess the financial implications of leaving early. The majority of HLS schemes are underpinned by an ELS scheme, giving a flat payment a hectare across the holding.

Payments under the new CS scheme will only be made on the options selected, so you may end up with a significantly lower payment, depending on the options selected.

Some have an increased payment rate, many are lower, so even a comparable range of options may result in a lower overall payment.

After assessing the management and financial implications, should you wish to progress, discuss with your Natural England adviser the possibility of a new scheme.

Remember, this scheme is competitive, so there is no guarantee you will be offered an agreement.

With regard to the recently opened hedgerow and boundary grant scheme, it is not possible to enter this if you have an existing stewardship agreement on 1 July 2016.

Also, capital payments are restricted to a maximum of £5,000 over a two-year period under the hedgerow and boundary grant scheme, so it is unlikely that leaving an existing agreement will be financially viable.   

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