Defra provides clarity on farming budget spend

Defra has offered clarity on how the agricultural budget for England is being allocated amid concerns from food and farming organisations over a lack of transparency about where the money is going.

On Monday 18 September, the department released its Food Farming and Countryside Programme annual report (PDF) for the financial year 2022-23.

The report shows Defra spent £2.23bn in 2022-23, which is below the Conservative government’s post-Brexit commitment to spend £2.4bn each and every year for the life of this parliament following the UK’s exit from the EU and the end of its involvement in the Common Agricultural Policy.

See also: Defra’s 2023 SFI scheme opens for applications in England

Due to historically high levels of inflation in 2022-23, Defra says it spent less than planned on capital grants, especially in relation to Countryside Stewardship (CS) grants.

But the slower-than-forecast spend on capital grants is now projected to occur in future years and Defra maintains it is still on course to spend an average of £2.4bn on the farming budget across this parliament.

“We are committed to rolling that money forward into 2024. We have agreed that with the Treasury, so it is ringfenced,” said farming minister Mark Spencer.

In 2022-23, Defra spent £1.37bn on the Basic Payment Scheme (BPS), having implemented two years of initial reductions. This compares with £1.8bn in 2020-21 before it started phasing out BPS payments.

The BPS pot is reducing again this financial year to £1.1bn as more funding is released from area-based subsidy to other areas.

ELM budget increase

This includes more than doubling the spend on the government’s Environmental Land Management (ELM) schemes, a higher annual spend on productivity and innovation grants, and more than doubling the funding available for the first round of the Slurry Infrastructure Grant due to very high demand.

The 2023 Sustainable Farming Incentive (SFI) scheme, the first component of ELM, opened for farmer applications on Monday (18 September) after it was delayed due to IT problems. But spending related to the uptake of SFI 23 will be allocated in the 2024-25 financial year.

Defra says 2024 will see the start of thousands of CS 2024 agreements, including more farmers in its higher ambition Higher Tier than ever before; the continued rollout of its new and improved SFI 23 offer to thousands of farmers; further spending on productivity, innovation and animal health and welfare grants; and increased funding for the Farming in Protected Landscapes scheme. 

But NFU vice-president David Exwood called for further clarity from Defra over the spending allocation for the current financial year and how monies will be allocated within the ELM scheme going forward.

“As BPS payments continue to reduce and with likely only a small percentage of farmers who have signed up for SFI 23 being paid this side of Christmas, it is critical that we get clarity on the spend and budget for 23/24 as soon as possible so that the full impact of the delayed rollout of new schemes on members can be fully assessed,” he added.