Shift to annual cycle for stewardship payments due to commence in July 2011

The Government is moving its Environmental Stewardship payments to an annual cycle starting in July 2011.

The move will affect the cash flow of some growers and farmers because those with new schemes starting after 30 June 2011 will have to wait for more than a year before they get their money.

The change applies to all Environmental Stewardship agreements that started on or after 1 February 2007 and has been introduced to protect the UK from expensive EU fines.

It follows an official European Commission audit that looked at whether England was complying with EU rules introduced in 2007.

The Government decided that to comply with the commission's view of the EU rules it needed to introduce additional checks before it can make payments to farmers and growers. The introduction of these checks prompted the move to a fixed annual payment cycle.

Currently a rolling system of agri-environment agreements operates, starting during each month of the year, with payments made on a six-monthly basis. The switch to an annual payment cycle means that after 30 June 2011, all farmers and growers will receive their two payments at the same fixed times - in the autumn and spring.

For new agreements, only those growers with a start date of up to and including 1 June 2011 will receive a payment next year.

For example a new or renewed agreement with a 1 March start date will get a payment in the same year, whereas those starting on 1 July or later will not get a payment until autumn the following year.

Farming minister Jim Paice said: "I deeply regret the impact that the unavoidable change in Environmental Stewardship payments will have on our farmers, but this is the only way to avoid large EU fines. We have pushed the start date back by an extra six months to give as much notice as possible so that farmers have time to plan for the changes."

NFU head of policy services Andrew Clark said: "This news provides some long-overdue clarity for our members regarding the changes that Defra is required to make. We are pleased that the existing twice-yearly payment format will be retained. And we are reassured that the size of payments and the total amount payable to farmers remains unaffected.

"But many farmers and growers rely on regular agri-environment payments when planning the cash flow for their farm businesses and we are concerned that anticipated payments will be less predictable and in some cases delayed.

"It's regrettable that as a result of the decision agreements will be disrupted. It's important that those already in an agreement, or about to enter one, plan ahead and consider how the start date is likely to impact on the amount of time they will have to wait to get paid."

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