Eustice: Ditch ‘outdated’ income foregone payments in ELM

Former Defra secretary George Eustice has urged his successor, Therese Coffey, to ditch “outdated” income foregone payments in the new Environmental Land Management (ELM) scheme.

Speaking to Farmers Weekly last week, Ms Coffey confirmed the income foregone methodology would continue to be applied when calculating payments in two of the ELM schemes – the Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) Plus.

Instead, Defra is offering top-up payments to English farmers, such as the SFI “management fee” of £20/ha for the first 50ha in the scheme, plus bonuses for “doing the right thing in the right place”.

But Mr Eustice, who spent seven years as a minister at the department, told Farmers Weekly he was of the view that the base payments needed to increase.

See more: Analysis: What Defra’s ELM update means for farmers

“There is no place for the outdated income foregone methodology in future agri-environment schemes, which is a vestige of the EU era,” he said.

“If we are to hit our ambitious targets for nature recovery, we need widespread uptake of the new schemes across the farmed landscape, and the government must let the market price for management options rise to the level required to get the uptake needed.”

The Treasury has been known to be sceptical of changing the income foregone model, because it is cheaper.

There is also some concern in Whitehall that moving away from this approach would mean the schemes would have to be declared “amber box” at the World Trade Organisation (WTO), as there is potential for them to distort production and trade. 

Amber box interventions are strictly limited for WTO members.  

But Mr Eustice said: “The UK has more than £3bn of amber box allocation within its WTO schedule for aggregate market support and it does not matter if all the schemes had to be declared.

“The WTO system for assessing these interventions is hopelessly outdated anyway and should not be considered a relevant factor.”