This paper extends the analysis we did on the potential impact of the government’s proposals to reduce Basic Payments to zero by 2028 and to introduce a new Environmental Land Management System.
This second paper models the effect of the proposed changes for seven farm types and for three levels of productivity. An important assumption we have made is that the profits that farmers earn from agri-environment measures are double compared with current levels.
The changes will most affect farms that are highly reliant on Basic Payments – cereals, mixed and lowland livestock farms. Sectors like dairy will be less affected.
The net profits of the middle 50% of farmers will fall significantly, by 47-68% (excluding dairy).
The bottom 25% also suffer significant falls, of 22-63%.
The top 25% performing farmers are much less affected, with profits falling by 6-19%. They are less reliant on Basic Payments and the cut is largely negated by increases in farm productivity and agri-environment payments.
Please contact us if you would like to run your farm through our model.