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Payment Rate Review - Costs and prices - LM0416

Aims and Objectives

• The New Environmental Land Management Scheme (NELMS), the successor to Environmental Stewardship (ES), will be a key package in delivering the Government's sustainable agriculture and rural policies and is likely to form a substantial part of the Rural Development Programme for England (RDP) 2014 -2020. NELMS will contribute to Defra strategic priorities for sustainable development, natural resource protection, supporting sustainable farming and food, and sustainable rural communities.
• A significant proportion of the budget for NELMS will come from the EU; EU rules must therefore be followed regarding the level at which payments can be set. These rules require that payment rates reflect any income lost in undertaking NELMS options, but they also allow for any additional costs directly incurred in implementing those options.
• EU rules require us to set a baseline of measures for which we cannot pay, such as complying with statutory obligations and those associated with the Basic Payment Scheme cross compliance and potential Greening measures.
• The rates set for payments seek to reflect typical income foregone for particular activities on a national basis. Calculations include a range of inputs and outputs, which are very detailed and go beyond gross margin comparisons. Income foregone and hence payment rates need to be calculated for NELMS. Defra is mindful that consideration of the payment rates requires confidence in the costs of participation that underpin these rates.

The purpose

• The purpose of this project is to provide Natural England with sufficient physical and financial data so as to enable Natural England to identify the marginal changes in the profitability of farming systems (income foregone plus extra costs) to be calculated when the typical participant enters land into a range of NELMS options.

• Accurate data is fundamental to improving the precision of income foregone calculations. This means that all assumptions must be made against cited evidence drawn from an appropriate number of independent, industry recognised and verifiable sources of information to reflect the national situation.

• An essential precursor to setting payments is the calculation of income foregone. This contract forms and integral part of that process – the production of cost data for the items that are fundamental to the calculation of income foregone.

• The capital grant items within CSF will also be reviewed as part of the current NELMS payment process
Project Documents
• FRP - Final Report : LM0416 Final report   (1096k)
Time-Scale and Cost
From: 2012

To: 2012

Cost: £20,000
Contractor / Funded Organisations
Andersons Farm Bus Consultants Ltd
Environmental Stewardship