The government has announced a new measure to help farmers firm up their cash flow as input costs continue to spiral to unprecedented levels.
The plan, announced in early May, will see payments under the Basic payment Scheme (BPS) made in two instalments across the year instead of one for the remainder of the Agricultural Transition Plan, which ends in 2028.
The scheme is being introduced to provide financial assistance to farmers reeling from huge hikes in the price of fuel, fertiliser, and feed costs, due to the war in Ukraine and turmoil in global markets.
Starting from this year, it will see 50 per cent of the overall payment made in July and the remaining 50 per cent in December.
Announcing the plan, Environment Secretary George Eustice said:
“We have decided to bring forward half of this year’s BPS payment as an advance injection of cash to farm businesses from the end of this July. It will give farmers some additional cashflow earlier to provide some confidence. We will also make this a permanent change to the way we pay BPS in future with twice yearly instalments going forward.”
Ian Parker, Director of Whitley Stimpson and agricultural financial expert, welcome the announcement, saying it would provide some short-term hope to farmers who were growing increasingly worried about the future.
“The global energy prices, lack of supply in the marketplace, the ongoing war in Ukraine, and reduced support payments have all combined to create a perfect storm for many UK farmers,” he said. “Although the government’s announcement doesn’t mean any more money in real terms, it does at least mean farmers will be able to even out their cash flow across the year by receiving two payments rather than just one. With judicious financial planning, this should help to ensure they ride out the worst of the storm and until the world starts to return to normal. However, he added a word of caution that farmers do need to budget carefully as it will be a shock at the end of the year when a much smaller BPS payment arrives than the ones that they have historically been used to.”
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