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<p>We are not at this time planning on applying inflation indices but we will review
payment rates for our offers so that they remain credible and attractive to farmers.</p><p>
</p><p>In light of recently rising input costs and price volatility around certain
agricultural commodities such as nitrogen fertiliser, the Government is planning to
change the way we make payments under the Basic Payment Scheme (BPS) in 2022. Eligible
farmers will now receive their payment in two instalments - half from the end of July
and the rest from December 2022. This will be a permanent change to Direct Payments
that will remain for the rest of the agricultural transition. By doing this, the Government
intends to inject cash into farm businesses, helping them to make business decisions
sooner, with more confidence.</p><p> </p><p>This builds on the increase in revenue
payment rates for the Countryside Stewardship scheme to reflect the change in costs
since 2013, which Defra announced in January 2022. The majority of payment rates increased,
on average by around 30%, although rate changes vary from option to option. These
changes affected around 30,000 agreements and show we are willing and able to respond
as and when there is a clear case.</p><p> </p><p>In March 2022, Defra began rolling
out the Sustainable Farming Incentive (SFI) to recipients of the BPS. SFI will help
with the costs of sowing nitrogen fixing plants and green manures in crops to substitute
some fertiliser requirements for the coming season, as well as reducing the dependence
on manufactured fertilisers which are impacted by the price of gas. Rising fertiliser
prices highlight that we need to find alternatives and move towards more organic-based
fertiliser products. SFI is designed to help farmers move to these new sustainable
farming methods gradually - which will improve environmental conditions of the land,
while building the long-term resilience of our food security and production.</p><p>
</p><p>The Secretary of State recently announced a range of measures in support of
the current situation, such as delaying changes to the use of urea fertiliser to help
farmers manage their costs and improving statutory guidance for use of slurry. Defra
has also created the Fertiliser Taskforce - where Government and industry are working
together to help improve market confidence and provide farmers with the information
they need to make business decisions on fertiliser use.</p><p> </p><p>Towards the
end of this year, farmers will be able to apply for slurry storage grants, helping
them to meet the Farming Rules for Water and reducing their dependence on artificial
fertilisers. This grant will contribute towards the costs of covered slurry store
construction projects, helping farmers to get six months storage capacity. We will
set the rates based on our assessment of the market at the time, as is our usual practice.</p><p>
</p><p>Defra is supporting investment in technology and research to further improve
productivity. The Farming Equipment and Technology Fund has offered grants of up to
£48m to over 4,000 applicants - enabling farmers to invest in equipment, technology
and infrastructure. We have also announced a new Adding Value theme - a £30 million
fund helping farmers and growers to process, diversify and add-value to their products
again using up to date market information.</p><p> </p><p>The Government continues
to monitor the wider context of global supplies that can impact farm income and productivity,
as well as take-up of our agri-environment and other schemes. Defra will use the findings
to inform our plans throughout the agricultural transition.</p>
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