DEFRA’s Consultation Window Opens for Lump Sum Exit Scheme

DEFRA has announced details regarding the proposed lump sum exit scheme where BPS claimants will be able to receive a lump sum to retire from or leave the farming industry.

The 12 week consultation asks for views on who would be eligible for this scheme and how the lump sum payments should be calculated. We summarise below DEFRA’s current thoughts on the initiative:


Am I eligible?

The scheme opens in the first part of 2022 and it is suggested that to be eligible, farmers will need to have claimed BPS since 2015 (or earlier). There may be exceptions where a succession has recently taken place.


How much will I be paid?

It is proposed that the package will equate to 2.35 times a reference amount. This reference is expected to be the average annual BPS payment the farmer has received between 2018 and 2020. For example, a farmer who received an average BPS payment of £20,000 per annum over the 3 years (£60,000 in total) would expect to receive a lump sum of £47,000.

A cap of £100,000 is expected to be applied, which will affect claimants who have an average BPS claim per annum of over £42,553 (or claim on approximately 450 acres of farmland).


What happens once I accept the lump sum payment?

Farmers who take up the scheme will no longer qualify for any further BPS payments and will need to surrender their BPS entitlements.

Owner occupiers will have to sell or rent out their land, however will be able to continue to reside in the farmhouse and keep up to 5% of their agricultural land.

Tenants on either an Agricultural Holdings Act or Farm Business Tenancy will have to surrender their agreement.


Have your views heard!

Whilst these figures and proposals are not set in stone, it paints a good picture of what we can expect from DEFRA when the lump sum exit scheme launches in early 2022. The consultation period opened in mid-May and closes on the 11 August 2021, and we expect to receive more details once this consultation window closes and views have been taken into consideration.

You can take part in the DEFRA consultation by following this link and completing the questionnaire regarding the proposed lump sum exit payment.

If you are interested in the lump sum exit scheme please contact our team on 01904 489 731 to register your interest and we will contact you to discuss the scheme when further details are announced.

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