BPS calculators helping farmers plan for future
Strutt & Parker’s farming department has had more than 200 external requests from farmers to run their details through our free Basic Payment Scheme (BPS) calculator over the past six months.
The tool was primarily created to help clients understand how progressive cuts to Basic Payments will impact their businesses, but we can also help farmers and landowners who do not currently work with Strutt & Parker to make these calculations.
A year ago we were, to some extent, still speculating about changes to agricultural policy, but now we are much more aware of the roadmap ahead.
2021 represents the first year of the phasing out of the Basic Payment Scheme (BPS), which is the most significant change for farming businesses for decades given that, on average, BPS accounts for about 60% of farm profit.
Our BPS calculator takes into account how payments could reduce until 2028, so businesses can start to consider the impact and make plans to mitigate this loss of income moving forward.
Defra has outlined how payments will be reduced until 2024 and we have assumed a straight line cut from then to 2028.
In a volatile sector, firming up as many knowns as possible is vital for farm budgets, to help ensure farmers are meeting their targets and not just repeating what they have been doing previously.
In many cases, the use of the calculator has led to conversations about changes in land use and enterprises as businesses plan for a future without payments.
Request our BPS calculator
The farming department also offers a net profits calculator which highlights how changes in farm support and the introduction of the new Environmental Land Management (ELM) scheme could impact on farm profits.
Our calculator generates a bespoke, two-page report for any farm. It produces estimates based on three scenarios – our standard assumptions plus an optimistic and a pessimistic one – for profits from farming, agri-environment, diversification and Basic Payments.
Request our ELMS and farm support calculator (Link to: https://rural.struttandparker.com/article/basic-payment-2018-and-2020-2028-calculators-now-available/)
