Category: Policy & Business

The revised Countryside Stewardship Higher Tier (CSHT) offering will not be available until next summer.  This news comes as part of a wider Defra announcement on the future of the scheme.  Readers may recall CSHT was supposed to have been opening in autumn 2024 to allow claimants to ‘draw-up’ applications ready for an early 2025 start date.

General

Countryside Stewardship is the second ‘tier’ of the Environmental Land Management (ELM) programme.  It provides payments for land managers who wish to do more intensive environmental work than under the SFI.  With the expanded SFI 2024 effectively taking over almost all previous CS Mid Tier options (see https://abcbooks.co.uk/expanded-sfi-offer-for-2024/), the CS is now Higher Tier only.  It is focused on the most environmentally significant sites (such as SSSIs) and woodlands which require more long-term and complex management.

The new CSHT offer includes 132 actions and 145 capital items (including 25 new options), plus a further 6 capital items to fund the preparation of plans that may be required to support an application (see below).  Defra is trying to improve the offer to encourage more people to apply with the aim of 1,200 new High Tier agreements by March 2026.

The details of all the actions, supplements and capital items, including payment rates can be found via https://www.gov.uk/government/publications/countryside-stewardship-higher-tier-get-ready-to-apply .  Note this is only ‘preview’ guidance; it sets out what can be done now to prepare and the funding available, the full guidance will be published before applications open in ‘summer 2025’.

Controlled Roll-Out

Similar to the SFI, CSHT will be rolled-out ‘gradually’.  The first applications will be by invitation only, these businesses will be contacted by RPA from 6th January 2025.  Natural England (NE) and the Forestry Commission (FC) will identify who is invited initially.  This will include;

• those with an existing CSHT agreement that expires at the end of 2025

• those with an approved woodland management plan already in place

• those who want to apply for an agri-environment agreement and have an approved plan in place so are ready to develop an application.

‘Invitations’ will be sent out monthly, to those in the above criteria, to receive ‘pre-application’ advice.  Those that do not fall within the criteria above will be able to contact RPA to let them know they are interested in applying.  More details on this process will be available in February and RPA has asked that customers do not contact them until then (!).

Applications will be made online via Rural Payments.  However, whilst those that will be invited can start to prepare their application from January, it will not be possible to submit an application until ‘summer’ 2025.   Similar again to SFI, once an agreement has been offered and accepted, the first payment will be made 4 months after and then quarterly thereafter.  CSHT agreements will last for 5, 10, 15 or 20 years, depending on the length of the longest action in the agreement.  Once fully opened, RPA will introduce rolling applications, so it will be possible to apply all year round with monthly start dates.  From summer 2025 applications will open up to a wider range of customers who will be ‘identified and invited’ to prepare an application – further information on this will be provided at a later date.

Defra is also making more ‘tools’ available to applicants for planning their proposals.  These include Implementation Plans, Woodland Management Plans, Agroforestry Plans, Species Rich Management Plans and Feasibility Studies with the aim of reducing the need for intensive pre-application advice from ‘arm’s length bodies’ cutting down on lengthy negotiations.  Furthermore, advice will focus on the actions available under CSHT where previously advice from NE and FC covered the entire holding.

Higher Tier & HLS Extensions

Following news that the Countryside Stewardship Higher Tier scheme will not be open for applications until next summer Defra has confirmed it will be offering ‘Mirror agreements’ and ‘extensions’ for existing Countryside Stewardship Higher Tier (CSHT) agreements and Higher Level Stewardship (HLS) agreements which will be expiring in 2024.

This means for some CSHT agreement holders RPA will be contacting them to offer a duplicate (mirror) of their expiring agreement, this includes the length ie. 5 or 10 years and all the exisiting options.  Agreements which originally included woodland will not be offered an extension because landowners won’t be able to carry out a mirror agreement on that same land.

For those with an HLS which has expired or is due to expire by the end of December 2024, they will be offered a 2 year extension and RPA will contact them accordingly.  For HLS agreements expiring in 2025, Natural England is reviewing each case and will recommend either a 1-year or 2-year extension.

The delay in the opening of the Countryside Stewardship Higher Tier is very frustrating.  It could also pose a difficult decision for those with expiring agreements.  Applicants must decide whether to wait for the new scheme to open, and hope they will be invited and given an agreement, and there aren’t too many (further) delays.  Or they could accept an extension or mirror agreement now.  However, this could lock-them-in for an extended period.  And payment rates are generally not as good under ‘old’ agreements as they are under the new ones.  We have been assured for a long time that it will be possible to end agreements and Defra are even saying ‘If you choose to extend your HLS agreement or accept a CSHT mirror agreement, over time you’ll have the option to end your extended or mirror agreement early if you want to apply for the new CSHT scheme once it becomes available.’  But what does ‘over time’ mean?  Up to now, it has been a very difficult process to end any agreement to go into a new offer.  We were told more information would be made available in September; but nothing has arrived.  Defra is currently saying ‘under the terms and conditions of your HLS agreement it is possible for you to end your agreement early to apply for a new SFI agreement’. However it goes on to say ‘Due to the complexity of closing agreements early, it may take some time to end your agreement and could result in a period of some months between one agreement ending and a new agreement starting. We will provide more information about how to close your agreement soon‘.  It will be well worth those in this situation having a good look at the new offer and making a few calculations. 

Some with existing CS or HLS agreements may decide to let them expire and simply enter into the SFI.  This may result in the land having a ‘lower level’ of environmental management – the opposite of what Defra might desire.  But, from the appplicant’s perspective, it is a more certain, risk-free and flexible approach.     

Andersons has released its annual publication looking at the prospects for farming for the coming year and beyond.  ‘Outlook 2025’ can be downloaded from – https://theandersonscentre.co.uk/publications/outlook/ .

The Land Use Framework for England has been delayed again.  It was originally due to be published in 2023 but has suffered repeated postponements.  Steve Reed, the Defra Secretary, stated in October that it would be published, and a consultation started, ‘before Christmas’.  However, speaking in the Lords at the end of November, the Defra junior Minister, Baroness Hayman, said that “We expect the green paper to be published for consultation in the New Year”.

The Finance Secretary, Shona Robinson, delivered the Scottish Budget for 2025/26 on the 4th December.  Much like its UK counterpart, this saw farm support maintained in nominal terms, which equates to a real-terms cut once inflation is considered.

The block grant from the UK to Scotland for revenue items actually increases by 1% in real terms for 2025/26.  The capital allocation goes up by 7% in real terms.  It can therefore be seen that other areas of spending have been prioritised ahead of agriculture.

General policy announcements that will have relevance to farming include;

• the Income Tax thresholds for the two lowest bands will be increased.  The Starter band will rise from £2,306 p.a. to £2,827.  The Basic band from £13,991 to £14,921.  There are no changes to the bands for the Higher, Advanced and Top rates and also no changes to any of the tax rates.  The tweaking of the lowest bands has enable the Scottish Government to state that over half of taxpayers will pay less in Income Tax than if they were elsewhere in the UK
• the level of Business Rates will be frozen for 2025/26
• increased funding will go into the Rural Tourism Infrastructure Fund (RTIF) with the aim of boosting visitor numbers and their spending.

Focusing on farm funding, the Budget announcement stated ‘£660 million for support’ – this actually appears to be £657.3m in revenue payments.  This compares with £663m estimated for the current 2024/25 year and the actual of £626.2m for 2023/24.  Thus, around the same budget in nominal terms, with no uplift for inflation.  The budget lines for BPS, Greening, Coupled payments and LFASS are all the same for 2025/26 as in 2024/25.  Spending on Agri-environment is forecast to drop from £25m to £21.5m next year.

The £657.3m will be topped-up by £23m of capital spending under an ‘Agricultural Transformation programme’.  This is part of the £43m previously taken from the agricultural budget.  The remaining £20m is due to be returned in 2026/27.  It is not currently clear how the Agricultural Transformation progamme will operate or what it will fund.

There is also funding in the wider Scottish Budget for forestry, advice, animal health & veterinary, land reform, the Islands, marine, natural resources, and research & analysis.  The full breakdown of spending for Rural Affairs, Land Reform and the Islands can be found at – https://www.gov.scot/publications/scottish-budget-2025-2026/pages/11/ .

The Government’s Spending Review is likely to be delayed until June.  This will extend the uncertainty over the budget allocation for agriculture after 2025.  When the Autumn Budget was presented, it was suggested that Departmental spending totals for the three years from 2026/27 would be set in the spring.  It is now reported in the Financial Times that this process is likely be delayed until the early summer.  Defra’s budget has been set for 2025/26 and this, in turn, has allowed the £2.6bn for the ‘Farming and Countryside Programme’ (essentially the successor to the Common Agricultural Policy) for 25/26.  However, there is no guarantee on funding beyond that – i.e. in around 15 months time.

Denmark will become the first country in the world to tax greenhouse gas emissions from livestock.

A ‘Green Tripartite Agreement’ has been struck between the government, the farming industry and environmental organisations.  This will see a number of measures enacted to reduce the environmental impact of agriculture including;

• a world-first tax on emissions of methane from livestock.  This will be based on CO2 equivalents and will start at 300 Kroner per tonne CO2e (around £34 per tonne) in 2030.  By 2035 this will rise to 700 Kroner (£84).  However, there is to be a 60% deduction on the tax, so the effective rates for farmers will be much lower.  Funds raised through the tax will be returned to the faming sector through support for environmental practices
• an agreement to reduce nitrogen emissions from agriculture by 13,780 tonnes by 2027 in an effort to improve water quality
• setting of a target that 10% of the land area of Denmark should be ‘forest and nature’ by 2045.  As part of this 140,000 Ha of low-lying drained peatland will be taken out of agriculture.  240,000 Ha of new tree planting is promised.  This will be voluntary with farmers paid to make the land use change.

Danish agriculture is intensive and very focused on livestock production, especially pigs and cattle.  This has created a number of environmental issues which this plan aims to address.  It will be interesting to see if any other countries take-up the option of a livestock tax now that Denmark has led the way.  

The Capital Grants scheme in England has been closed.  We wrote last month that the scheme, which provides funding for enviromental work (previously known as Countryside Stewardship capital grants), had seemingly been ‘paused’ as no agreements had been offered for a number of months.

The closure of the scheme was confirmed on the 26th November when a small notice was added to the relevant section of the Defra website stating ‘Capital Grants 2024 are currently closed‘.  Subsequently Defra has written a blog (see https://defrafarming.blog.gov.uk/2024/11/27/an-update-on-capital-grants/) in which it says, ‘due to an overwhelming demand for some capital grant items, the main capital grant offer will have closed to new applications – a total of 76 grant items.  This is being done to prioritise funds for areas that will have the greatest benefit for food security and nature conservation’.  According to Defra, the high demand for some grant items has led to spending levels that ‘aren’t sustainable’ for this year – it is forecast to spend 49% more on capital grants this year than in 2023/24 and 125% more than in 2022/23.

There is no indication when the scheme might reopen, it does talk about being ‘temporarily closed’ to most new applications with a further update in ‘early’ 2025.  For those who have already applied and are waiting, it seems they will be put ‘on hold’ for now and applicants will be contacted in early 2025 with information about what happens next.

The following grants remain open;

• Woodland Tree Health Grants
• Capital Grant Plans and Management Plans
• Protection and Infrastructure Grants
• Higher Tier Capital Grants

Further details for these can be found via https://www.gov.uk/government/collections/capital-items-guidance-for-applicants-and-agreement-holders?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=571a361e-7871-4f0d-b943-318bffa13b5b&utm_content=daily

The Welsh Government released further details on the Sustainable Farming Scheme (SFS) on the 25^th November.  This sees significant changes made to the scheme since the consultation was issued last year (see https://abcbooks.co.uk/welsh-sfs-consultation/ ).  The most eye-catching move has been the dropping of the 10% tree-cover requirement.

The document that has been published (see https://www.gov.wales/sustainable-farming-scheme-proposed-scheme-outline-2024-html) is described as an ‘interim position’.  The Government is keen to point out that this is not the final scheme and consultations will continue.  Economic analysis and impact assessments will also be carried out.  The final scheme will be published in summer 2025 ahead of the 1^st January 2026 start date.  The current document also does not contain any payment rates.  The Welsh Government is likely waiting to see what it is allocated in Spring’s Spending Review before being able to make this decision. 

The main changes to the SFS are;

• removing the Scheme Rule to have 10% tree cover. This was one of the most contentious elements of the original plans. Universal Action 13 (UA13) has been re-written so that each farm will have to produce a plan to identify the opportunities for planting additional trees and creating new hedgerows across the farm.  There will be no specific farm-level percentage targets however; although there will be scheme-level targets on woodland creation.  There will be grants available for hedges and trees under the Optional Actions tier of the SFS.  The other ‘Scheme Rule’ of having 10% Habitat Area across the farm is being retained.  There is the option to create temporary habitat to meet this requirement, however
• the overall number of Universal Actions has been reduced from 17 to 12. UA4 – Multispecies cover crop; UA6 – Managing modified peatland; and UA10 – Ponds and scrapes, have all been dropped.  UA15 to 17 have been combined into a single, simplified, ‘Animal welfare’ Universal Action.  Most of the Universal Actions that have been dropped have been moved into the Optional Actions – the second tier of the scheme.  Many of the UAs that have been retained have also been revised – with 10 out of the remaining 12 being amended
• the Universal Baseline Payment will be available on Common Land – based on the number of grazing rights
• payments for Universal Actions will be available on Sites of Special Scientific Interest (SSSI)

Details of the changes were announced by the Welsh rural affairs minister Huw Irranca-Davies at the Royal Welsh Winter Fair.

Preparatory Schemes

Our article earlier in the month gave details of application windows for further SFS Preparatory Phase schemes see https://abcbooks.co.uk/sfs-preparatory-schemes-wales/

It has been suggested the the Higher Tier Environmental Stewardship scheme may not be open for applications until next summer.  Although not yet confirmed by Defra, the CLA stated at its Annual Conference that it had been informed that there would be a significant delay.  The scheme was orignally planned to be open in mid 2024.

Although there has been no formal notification from RPA, it appears that the Capital Grants schemes in England have been put on hold whilst a review of the schemes is carried out.  We have been made aware that no scheme offers have been made for a while now for applications to the stand alone (‘environmental’) capital grants which are open all year round.  Furthermore there has only been one round of the smaller Farming Equipment and Technology Fund (FETF) this year, after being told earlier in the year (albeit under the previous Government) there would be three.  It is believed budget pressures and an increase in applications has prompted the RPA to review its offering to ensure there is value for money.  An announcement regarding the schemes is expected shortly.