Policy Pre-Brexit: The EU’s Common Agricultural Policy (CAP)

Before the UK left the European Union, British farmers were heavily reliant on the EU’s Common Agricultural Policy (CAP) for financial support. CAP, which has been a cornerstone of European agricultural policy since the 1960s, was designed to ensure food security, stabilise agricultural markets, and support the rural economy across EU member states.

For farmers in the UK, CAP payments made up a substantial portion of their income, often accounting for more than half of their revenue. The policy worked through two main mechanisms: direct payments to farmers based on the land they owned and additional payment for specific environmental or rural development activities.

Direct Payments (Basic Payment Scheme – BPS):

The Basic Payment Scheme (BPS), a key part of CAP’s legislation, provided direct payments to farmers based on the amount of land they managed. This system was often referred to as “decoupled” payments because they didn’t require farmers to grow specific crops or raise certain animals – they simply had to manage their land according to basic environmental standards.

Farmers could also receive additional funds for maintaining certain ecological features on their land, such as planting hedgerows or leaving land fallow to support biodiversity.

Rural Development Programme:

While BPS focused primarily on direct payments to landowners, the Rural Development Programme targeted initiatives aimed at the growth of the countryside and environmental stewardship practices. The programme funded sub-schemes that allowed farmers to invest in projects related to agri-environmental schemes, animal welfare improvements, and rural economy support.

Farmers had to apply for these grants through detailed proposals, often involving specific incentives such as planting trees, restoring wetlands, or improving farm infrastructure. The goal was to not only encourage an increase in productivity for farming but also place an emphasis on environmental sustainability.

Post-Brexit: The Shift to a New UK Farming Subsidy System

Following Brexit, the UK left the EU’s Common Agricultural Policy behind, and the English government began designing a new system of farming subsidies. The primary aim of this new system is to move away from land-based payments and reward farmers with “public money for public goods,” such as enhancing the environment and mitigating climate change.

The new subsidy system is being rolled out across the UK, but England is leading the way with various comprehensive strategies.

The Environmental Land Management Schemes (ELMs)

The ELM framework is centred on three key programs designed to encourage sustainable farming practices:

1. Sustainable Farming Incentive (SFI)

The SFI scheme is all about paying farmers to adopt environmentally friendly practices that improve the land they manage. These practices could also include things like improving soil health, planting cover crops to prevent erosion, and maintaining permanent grasslands. By offering payment for these actions, the government aims to incentivise sustainable farming that benefits both the land and broader society.

2. Countryside Stewardship (CS)

The CS program goes a step further, supporting farmers who undertake long-term projects to improve biodiversity, create wildlife habitats, or preserve cultural landscapes.

3. Landscape Recovery

The scheme is aimed at large-scale environmental projects that go beyond individual farms. For example, it might include rewilding initiatives, peatland restoration, or river catchment recovery.

Phasing Out Direct Payments

Since the 2021 introduction of Environmental Land Management Schemes, BPs payments have been on a gradual phase-out and will come to an end in 2027. These payments were originally tied to the amount of land a person owned. However, under the new system, which is seeking to revolutionise environmental improvement and help combat climate change, the focus on farmers’ financial incentives has shifted.

In their place, farmers in England under the post-Brexit scheme will receive payments for providing environmental benefits. This could include additional farmer responsibilities such as enhancing biodiversity, reducing carbon emissions, or improving water quality. The shift made a significant change in how farming is supported in England, focusing less on land ownership and more on public goods.

The ultimate goal is to create a more sustainable, resilient, and productive agricultural system that balances food production with environmental protection.

Ongoing Uncertainty and Concerns

There is growing concern amongst farmers regarding their financial security, showcased in the steep incline in farmers’ political involvement (protests over farmers’ inheritance tax, for example). Following an abrupt closure of applications for the SFI in March 2025, many farmers are feeling insecurity regarding the future of British farm funding and the long-term health of the farming sector.

While those already involved in the scheme will continue to benefit, this has instilled the fear that the SFI will face a complete closure in years to come. A growing consensus amongst farmers is that the recent governments have been more concerned about short-term finances, discounting the future of farmers and the movement towards the environment so far.

A revised version of the scheme is anticipated, but details remain scarce, leaving farmers in an uncertain state. The situation underscores the need for clear, consistent, and well-communicated agricultural policies. As the UK continues to redefine its farming subsidy policies post-Brexit, ensuring that farmers are adequately supported and informed will be essential for the future success of sustainable agricultural initiatives.

At Collington Winter, we understand that the evolving landscape for British Farming Subsidies can feel complex and uncertain, especially in the wake of sudden changes. That’s why we’re here to support landowners, farmers, and rural businesses through every step of the transition, ensuring you make complaint, future-focused decisions.

Our team specialises in providing alternative farming income advice for farmers who are well established in the new post-Brexit schemes, and those who need to are looking to get involved, as well as offering guidance to mitigate the effects of government legislative changes.

We have experience supporting farmers and land managers with large and small farmland, and we offer a range of services covering environmental land management and planning long-term strategies to enhance land productivity and profits.

Get in touch with us today to learn how we can help you navigate the future of British farming with clarity and confidence. Call us on 01204 939608, email info@collingtonwinter.co.uk, or complete our contact form to speak to a member of our team.