My Lords, I declare my interests as set out in the register.
This instrument continues the important agricultural reforms we are making in England. Through these reforms, we are investing in the long-term prosperity of the sector and the future of our precious environment—things which I know many in this House care deeply about. The instrument applies progressive reductions to delinked payments for 2024. Delinked payments were introduced on 1 January 2024 in place of payments to farmers under the basic payment scheme in England. We are phasing out untargeted subsidy payments, as they have held the industry back and done little to improve food production or the environment. We are doing this gradually, over our seven-year agricultural transition period in England. That period began in 2021, so we are now in the fourth year of the transition.
The Government first announced the reductions in this instrument in the agricultural transition plan, published in November 2020. We are applying the reductions to delinked payments in a fair way. Higher percentage reductions are applied to amounts in higher payment bands. We plan to make delinked payments in two instalments each year, which will help farmers with their cash flow.
By continuing gradually to reduce these subsidy payments as planned, we are freeing up money so that farmers can access a wide range of environmental land management schemes and grants to suit all farm types. At this year’s National Farmers’ Union conference, the Prime Minister reiterated our commitment to maintain total farm support at an average of £2.4 billion per year across this Parliament. Therefore, the money that is no longer being spent on untargeted subsidies is not lost to farmers; instead, it is being put to better use. It is being redirected to the sustainable farming incentive and other farming support, which help boost agricultural productivity and resilience, increase food security and deliver for the environment. Our new schemes are investing in the foundations of food security and profitable farm businesses—from healthy soils to clean water.
Earlier this year we updated payment rates in our environmental land management schemes, the average uplift being 10%. Some payment rates went up by significantly more: for example, species-rich grassland has risen from £182 to £646 per hectare.
This summer, we will launch up to 50 new actions, which will allow farmers to access scheme funding for things such as precision farming and agroforestry for the first time. The new actions give farmers even more choice about what they can do, especially those on moorlands and grasslands.
Nearly half of all farmers are now in one of our environmental land management schemes. So far, there have been around 22,000 applications for the sustainable farming incentive under our 2023 offer, and more than 21,000 agreement offers have been issued. There are now over 35,000 live Countryside Stewardship agreements—more than double the number since 2020.
The sustainable farming incentive can help to reduce costs and waste on farms, to make them more resilient and to improve food production by, for example, funding farmers to plant companion crops to help manage pests and nutrients, to assess and improve the health of their soil, and to grow cover crops to protect the soil between the main crops. We are designing our schemes so that they work for smaller farms. We have doubled the management payment for the sustainable farming incentive, which is now worth up to £2,000 for the first year of an agreement. This will help to attract even more smaller farms into the scheme.
Smaller farmers potentially have access to more income than they did before. Under the basic payment scheme, half the money went to 10% of the largest farms. Under the sustainable farming incentive, payments are based on the actions that farmers take, rather than simply the amount of land they have. This means that SFI agreements can produce more income than the basic payment for a typical farm.
Farmers taking part in the sustainable farming incentive are typically more than making up their lost basic payments so far. The value per hectare of applications so far is £148. This, alongside delinked payments for small farms this year—equivalent to £117 per hectare—adds up to more than the value of the basic payment scheme per hectare before the start of the agricultural transition. That is £233 per hectare under the basic payment scheme, versus a total of £263 under delinked payments and the sustainable farming incentive.
This year, we will make it even easier for farmers to access the funding by allowing them to apply for actions previously in Countryside Stewardship mid-tier and the sustainable farming incentive through one application process. In February, we announced the largest-ever grant offer for the agricultural sector, totalling £427 million. This includes a doubling of the investment in productivity and innovation in farming to £220 million this year. This provides support for farmers to invest in automation and robotics, as well as solar installations to build on-farm energy security. It also includes £116 million for slurry infrastructure grants and £91 million for grants to improve the health and welfare of our farmed animals.
We are providing a range of other support for farmers and land managers. This includes a third round of our landscape recovery scheme later this year. The farming resilience fund continues to provide free business support to help farmers plan and adapt their businesses. To date, more than 20,000 farmers have received this support.
In conclusion, the Government continue to back our farmers. We are investing in our new schemes and grants, which are helping farms and food production become more resilient. They also deliver better outcomes for animals, plants and the environment. We must press ahead with these reforms as planned. As ever, I am happy to take any questions. I beg to move.