A long-awaited government scheme to encourage older farmers to leave the industry could be attractive for some producers, say industry leaders.
But it will not be the answer for everyone – and more details are needed about how the scheme will work. Younger farmers say it is only half the equation – and new entrants must be encouraged into agriculture.
The proposals will see older farmers offered a lump sum payment to help them retire or leave the industry in managed way. The lump sum would be about 2.35 times the recipient’s existing annual basic payment – up to a maximum of £100,000.
Defra secretary George Eustice said: “We need to address the twin challenges of helping new entrants fulfil their dream and gain access to land, while also helping an older generation retire with dignity.”
The exit scheme would offer farmers wanting to leave the industry a real incentive to confront what was often a difficult decision, said Mr Eustice. It would help them them clear bills and settle debts, he added.
By renting out their farm or surrendering their tenancy, those exiting the industry would create opportunities for the next generation of farmers. Government plans to encourage this will be published later this year.
The Tenant Farmers Association said farmers who might find the scheme attractive included smaller owner occupiers who were reaching the end of their career without successors. They could can retain ownership of their land but rent it out.
Tenant farmers in a position to discuss tenancy surrender and a compensation package with their landlords could also benefit. So too could tenants with suitable successors waiting in the wings to take over their farms.
TFA chief executive George Dunn, said: “As part of a portfolio, which might include a surrender payment from a landlord for a secure tenancy, sale of livestock and equipment and other pension provision, it could be a very useful catalyst.”
The scheme seeks to offer a fairer system for farmers, encouraging generational change by providing more flexibility for new entrants to start up their farm businesses and supporting those ready to leave the sector to do so on their own terms.
But Country Land and Business Association president Mark Bridgeman said: “The consultation does give much-needed information on the exit scheme. But for those considering the scheme, there are still many questions to be answered.
“The scheme will not be for everyone, but if the scheme is to contribute to industry restructuring and create opportunities for new entrants and those wishing to expand, there are some critical issues to be addressed.”
These included clarity on tax treatment of lump sums payments, and the eligibility and exit conditions. “The biggest challenge is the timing, and there can be no further delays in launching the scheme later this year.”