Legislation to go before MLAs at Stormont during February 2025 will give DAERA the legal power to introduce a new area based payment to replace the current Basic Payment Scheme (BPS).

Briefing the Stormont Agriculture committee last Thursday, Dr Rosemary Agnew from DAERA said the legislation allows the Department to make a Farm Sustainability Transition Payment in 2025, ahead of a switch to a new Farm Sustainability Payment (FSP) in 2026.

For farmers, the new transition payment in 2025 effectively comes with the same rules that existed under the BPS in 2024.

The original plan to increase the minimum claim size from 3ha to 5ha has been dropped by Agriculture Minister Andrew Muir, after objections were raised by MLAs on the Agriculture committee last May.

Other changes are being deferred until 2026, including the potential exclusion of around 2,400 non-active farmers from the direct payment regime.

Analysis

To be eligible for future payments, DAERA has previously indicated that farmers must have had livestock, or at least 3ha of crops, in 2020 or 2021.

An analysis of data suggests just over 1,900 current claimants of BPS do not meet these historic eligibility requirements. There are a further 500 businesses who leased out all their entitlements in those two years.

“The department will communicate with those farm businesses potentially impacted by this policy change during 2025 to enable them to plan effectively,” Agnew told last weeks’ committee.

An appeals process will be put in place, allowing businesses to come forward with “any additional evidence”.

However, for those who don’t appeal, or are unsuccessful, they will have little alternative but to sell their entitlements in the 2026 entitlement trading window (which normally runs from March to early May). Any entitlements not traded, will expire.

Long-term leases

There are also a small number of businesses who have entered into a long-term lease for entitlements.

Where this lease agreement goes beyond 15 May 2026, the entitlements will remain with the lease holder until the agreement comes to an end.

They will then return to the original owner, but only if that person is eligible for the new FSP. Otherwise, these entitlements will also expire. From 2025 onwards, new lease agreements for entitlements will be limited to one year.

Despite the potential for well over 2,000 farm businesses to trade entitlements in 2026, Department officials don’t believe it will cause severe disruption in the market, as land eligibility rules are also changing that year.

Under those changes, all land, outside of hard features such as lanes, sheds etc. will be eligible area to claim payments. Previous estimates suggest that could increase the eligible land area in NI by 40,000ha or 4%.

Farming with Nature scheme

For those landowners outside of the FSP in 2026, they will also be automatically excluded from the beef carbon reduction scheme and new suckler cow payment. However, they will be eligible for other payments, including from the Farming with Nature scheme.

When the new area-based Farm Sustainability Payment (FSP) is fully rolled out in 2026, it will come with various conditions.

As well as new land eligibility rules and a new set of farm sustainability standards to replace cross compliance, farm businesses will have to participate in the soil nutrient health scheme (SNHS), carbon benchmarking and the new bovine genetics programme.

“Participate means joining the schemes, having the test done, the audit done, but also undertaking the associated training. That’s the plan for 2026,” confirmed Dr Rosemary Agnew.

Carbon footprinting

While the SNHS is now in its third year of four, a timeline published by DAERA shows that the carbon footprinting project should begin later in 2025, with data collection in the bovine genetics programme due to start in early 2026.

Beyond that date, Agnew said there might be a further condition attached to the FSP relating to a habitat assessment of the farm.

“We are a long way off being able to require that of all farmers because the technology is not there. It hasn’t been tested but it certainly would be an ambition of our current minister,” she said.

More flexibility for DAERA on finances

The regulations going before Stormont this month, which will allow DAERA to introduce the new Farm Sustainability Transition Payment in 2025, also introduce new flexibility for the Department around finances.

Under previous rules, DAERA had to determine and publish the financial ceiling for the Basic Payment Scheme each year (around £293.5m in 2023).

That requirement to publish the annual ceiling is being removed, while new powers to switch money between schemes is being added in.

It means the Department could top-up the money being paid out to farmers in an area based payment with unspent money from other schemes, thereby ensuring the total budget is being utilised.

Alternatively, the legislation gives DAERA more flexibility to move money from area based schemes into the likes of the Farming with Nature package.

EU legacy schemes such as the Young Farmers’ Payment (YFP) and the Regional Reserve are coming to an end in 2025, Dr Rosemary Agnew told the Stormont Agriculture committee last Thursday.

Successful applicants to the YFP in 2025, will still receive the normal top-up on entitlement values for the next five years. However, it will also be the last year that young farmers and new entrants can obtain entitlements from the Regional Reserve.

From 2026 onwards, a new entrant to farming will either have to buy or lease, payment entitlements. With “very small numbers” coming forward in the last seven years for both the YFP and Regional Reserve and with reviews suggesting neither delivered “value-for-money”, future support will be in the form of a Farming for the Generations scheme, said Agnew.

“This new scheme, rather than focusing on purely financial incentives, is designed to take a holistic approach to generational renewal which supports the intergenerational needs of the farm family,” she added.

A pilot programme, run by Rural Support, was launched last October.

Around 250 farm families took part in initial awareness sessions, with 110 expressing an interest in moving on to the next stage where they will consider the Planning for Succession element of the pilot scheme.

“That pilot will then inform a fuller scheme planned to open around 2026,” said Agnew.

Money will shift to Farming with Nature

In 2024, all direct payments were cut 9% to fund beef schemes and with a new suckler scheme to start from April 2025, there is the potential for this deduction to increase to 17%.

If that happens, the Farm Sustainability Transition Payment entitlement values in 2025 will be 17% lower than the Basic Payment Scheme entitlement values in 2023.

However, there is also the potential for DAERA to shave off more money to help fund a new Farming with Nature package, to replace the Environmental Farming Scheme (EFS).

“We have always been very clear from the beginning, that we will redirect funding,” confirmed Dr Rosemary Agnew.

She said that two funding streams will be required for Farming with Nature – one from the farm support budget and the other being capital funding direct from government.

“We have not worked through what this actually means in practice, but Farming with Nature will be funded from two budget lines,” she said.

New conditions for payments in 2026

The Farming with Nature measures are to be phased in, starting with a transition scheme due to be launched by Agriculture Minister Andrew Muir at the 2025 Balmoral Show.

It will consist of a series of actions that farmers can apply to do, such as planting hedgerows, creating riparian buffer zones along waterways and maintaining winter stubble, confirmed Manus McHenry from DAERA.

DAERA faces more scrutiny from MLAs

NI is currently the only part of the UK where a devolved government has earmarked an agricultural support budget for the next financial year and future years to come. While that gives a level of assurance to NI farmers, it potentially increases the level of scrutiny on DAERA.“It means that as a department, we will have to show to our taxpayers and to the [Stormont] executive that we can deliver change and value for money against this commitment of funding,” suggested Dr Rosemary Agnew.

One largely symbolic change has been the renaming of the overall package of measures by Agriculture Minister Andrew Muir from the Farm Support and Development Programme to the Sustainable Agriculture Programme. “This is to clearly relay its importance in supporting change for a sustainable future and the key role that it will play in delivering his priorities,” suggested Agnew.