Future English Hill Support

The idea of amending the current three English SPS regions in order to provide more support to hill farmers seems to be gaining ground.  This is something that we have been talking about for a while, but hadn’t seemed to be on policy-makers’ agendas.  However, there are signs that the SDA region could be merged into the ‘lowland’ region – the NFU reports that Defra is looking into the option.

This would have the effect of raising payments in the Severely Disadvantaged Area – i.e. the on the most challenging upland farms.  The current SDA payment is some 20% below the lowland rate.  The lowland rate would drop somewhat as there would be an averaging effect.  If it is found to be too administratively complex to combine regions, an alternative option with the same effect is to just move funding up the hills by reducing the regional envelope for the lowlands and increasing it for the SDA. 

This could be part of a wider package to support the uplands.  There seems to be a recognition that ‘the market’ is unlikely to deliver high enough returns to hill farming to sustain viable businesses in the long-term without public support.  The previous policy was to pay producers directly for the environmental benefit they delivered – hence the move from the HFA to the Uplands Entry Level Stewardship.  The problem is that payments under agri-environment schemes can only be based on ‘income foregone’.  If incomes are fundamentally low this does not help support businesses.  Also, it is difficult to reward farmers through these schemes for the more intangible benefits provided by farming in the uplands.  Therefore, it seems as if basic income support to hill farmers is coming back into fashion.  The idea is that you need to keep businesses in the hills so there is someone there to deliver the land management stuff.

Another element of the package could be the use of BPS top-up payments through the Areas with Natural Constraint mechanism.  Whether DEFRA would want to use this route is open to question.  It seems complex, and other policies may may well be favoured.  The third element could be some specific hill support under Pillar 2.  This could possibly be linked to environmental management, but maybe not – therefore a return to a scheme more like the old HFA, or the current LFASS in Scotland.  The last bit would be agri-environmental programmes with the schemes simply open to everyone across England.  Environmental payments would just be for environmental management, and not a back-door way of supporting farm businesses.