The Lump Sum Exit Scheme is a new UK government venture aimed at supporting farmers who want to leave the industry. It falls under reforms set out in the Agricultural Transition Plan.
The Department for Environment, Food and Rural Affairs s of the opinion that this will allow farmers to exit the sector “in a managed way” will be in farmers’ “best interests”. Defra says the scheme is in response to the difficulty farmers face leaving the industry due to financial reasons.
The scheme will be opened in April 2022, with the application period running until the end of September. It will base payment on average direct payments made to the farmer for the 2019 to 2021 Basic Payment Scheme years. The department will cap this reference figure at £42,500 and multiply it by 2.35 to calculate the lump sum.
Thus, farmers could receive up to around £100,000.
In turn, farmers will surrender their entitlements, and the department expects them to either rent or sell their land or surrender their tenancy. The purpose being to create opportunities for new entrants and farmers wishing to expand their businesses.
The government has also partnered with industry leaders, local councils and landowners to design a new entrants scheme to create opportunities for new farmers.
Environment Secretary George Eustice comments that, “The purpose of The Lump Sum Exit Scheme is to assist farmers who want to exit the industry to do so in a planned way and provide them with the means to make a meaningful choice about their future. Direct payments currently made through the Basic Payments Scheme offer poor value for money.”
Secretary Eustice confirmed that the government will also move forward with plans to separate Direct Payments from the amount of land farmed from 2024.
LSL News.