The environment secretary, Michael Gove, kicked off 2018 by confirming that farmers would continue receiving similar levels of farm subsidies until 2022, but a specialist accountant at Buckinghamshire-based firm The Fish Partnership has said farmers still need to be ready for future cuts.
Farmers currently receive around £3 billion a year from the EU in subsidies which are based on the land they manage or own.
This latest announcement will give them an additional two years, on top of the original 2020 deadline promised after Brexit, to prepare for the new farm payments system.
The Government has said this new system will reward farmers for looking after the environment and making land more accessible to the public.
Mr Gove described the EU’s Common Agricultural Policy as “unjust” and as a system that didn’t “really reward efficiency”.
He said that during the transition to the new system the Government would aim to reduce the largest subsidies, with a maximum cap or a sliding scale of reductions and insisted there would be a “smooth path” towards a new way of paying farmers when EU subsidies ended.
Commenting on the new plan for farm payments after Brexit, Paul Laird, a Director at The Fish Partnership and an expert in rural affairs said: “Many farmers will welcome the two additional years of funding, but they must remember that this means they only have four years to prepare for a completely new system – the details of which are still to be fully fleshed out.
“Mr Gove has suggested that farmers will be rewarded for undertaking actions that benefit the environment and public, so farm businesses need to consider how they can adapt their current business model and land management in preparation for this new system.
Paul added that research showed that a cut in subsidies would see the average UK farm income fall from a current level of around £38,000 per year to nearer £15,000*.
“Whether you agree or don’t agree with the Environment Secretary it is vitally important that farms begin preparations now, as very few businesses could survive their income being effectively halved as some studies have suggested,” added Paul.