Cereals 2023: U-turn on pledge to move past income foregone in ELM

Farming minister Mark Spencer has rowed back on a Defra pledge to move beyond income foregone payments in the Environmental Land Management (ELM) scheme.

Former Defra secretary George Eustice was insistent that base payments in both the Sustainable Farming Incentive (SFI) and Countryside Stewardship+ needed to rise in order for the government to hit its targets for nature recovery.

See also: Eustice: Ditch ‘outdated’ income foregone payments in ELM

Once out of office, he even branded the income foregone methodology an “outdated vestige of the EU era”.

Top Defra civil servants have also previously said they were working on moving away from the income foregone model, but warned it was a “challenge” to do so.

Asked during the political session at Cereals in Nottinghamshire this week whether the department had abandoned these plans, Mr Spencer said the debate around income foregone had “come and gone”.

“I don’t think we ever really were in that place,” he added.

“We’re redesigning the whole system to try to support farmers in a new world which is rapidly coming. I accept that is very challenging, but the £2.4bn which was there for the Basic Payment Scheme is ringfenced and is not going anywhere.”

NFU president Minette Batters, who was also speaking during the session, responded by saying the ELM payment rates had to go up.

“The real danger is we end up with an underspend, and that sends a message to government and the public that this industry isn’t interested,” she added.

“That could not be further from the truth. So I really urge you to up the payment rates so we can get people on to the platform.”

Defra has recently announced payment increases for upland farms under ELM and, in certain situations, payments for these actions will go beyond income foregone. 

During a separate interview with journalists at the event, Mr Spencer was pressed by Farmers Weekly on whether he would fight for the overall agriculture budget to be increased at the next election, if it became clear that more money was needed to meet the government’s environmental goals.

He said: “That’s a private discussion to be had with the Treasury. I’m not going to sit here and say “don’t worry, I’ll get more money out of Treasury”, because that’s a sure-fire way to not achieving what you want to achieve.

“But I think we’ve got a very strong case that we are not only keeping people fed, but we are doing that on the journey towards net zero, on the journey towards improving biodiversity and the environment at the same time.

“It is a competitive world. The health secretary is going to be going to the Treasury to say “I want money for hospitals” and the education secretary is going to be saying she wants money for schools.  

“As a department, we have got to demonstrate we’re getting good value for money to the taxpayer and seeing those improvements.”

A Defra spokesperson said: “Our position on income-foregone-plus costs is clear, and we recognise the challenges that this poses to farmers.

“That’s why we’re continuing to explore alternative approaches, to make sure that our schemes are attractive to farmers and reward them fairly for their work, and are already making improvements through Countryside Stewardship Plus and our payment rates for upland farmers.”