Impact of Stewardship payment dates
For those of you who have been in stewardship schemes for a number of years, you have come to understand that the monies you receive are nearly always paid on time, the amount they said it would be and it arrives half yearly. So if your agreement started in August you got paid every February and August following. Very simple and straight forward… that was how it was, but if your agreement started after 1 February 2007 you will be aware that there have been some changes to the payment dates of your stewardship scheme.
In the spring of 2011 (and in some cases November 2010) letters were sent out by Natural England detailing that your payment dates were going to change to meet EU law. These changes were to come into play from June 2011. The letter painstakingly detailed when payments were going to come in, splitting it into annual and partial payments. This letter contained a vast quantity of detailed information which wasn’t particularly easy to understand of which only a few points were relevant. The effects are now being felt and hitting cashflows hard.
It is now impossible to calculate exactly when you will be paid. Put simply, you will now be paid approximately a year in arrears, but it’s hard to say when it will arrive as Natural England have a 3 month payment window for each payment. Using the example payment dates above, those August and February payment dates have now changed to April and December, but it could be sooner, but it may not……… The payment that would have been paid in August 2011 was then not due to be paid until the following April 2012 (8 months later). They actually managed to pay this at the end of December 2011 (early) however the next scheduled payment will now not be until December 2012 (some 12 months later). Clear?…(as mud)!
Those in the uplands will have double the uncertainty, as the Uplands ELS is effectively tying up two lots of significant monies (the HFA monies and the Entry Level Stewardship monies), and so could cause a greater impact.
It’s not the fault of Natural England, or their staff as they are equally fed up of adapting a perfectly good payment system to meet EU legislation. The reason for the change is that they cannot pay you until all the cross checks on your Single Payment Scheme application have gone through. Another mechanism introduced by DEFRA which is resulting in delayed payments and an ability for the RPA to withhold or withdraw monies in case of penalties. The frustrating aspect is that the previous payment system was much simpler and far easier for agreement holders to understand. More importantly the sporadic nature in which payments are now being issued is having a detrimental impact upon financial budgeting.
Many will have scheduled HP payments to go out when stewardship monies come in, normally a very sensible idea, and now may find the pot bare at the time when money is most needed. The problem that this produces is further compounded by the fact that it takes a lot more cash to produce the same level of profit in earlier years. Add to this the unpredictability of the weather and what the harvest will eventually yield, the availability of winter feed and straw this year and the weakening Euro, it’s going to be harder than ever to make any concrete predictions. And that’s the problem – its impossible to do any proper planning and the overdraft limits are fast approaching.
Historically for all farmers, certainly in the North, this time of year is always the leanest, there’s nothing to sell yet as harvest hasn’t started, lambs aren’t quite ready and due to the weather cattle are a little off track….and the result is a general lack of cash. The solution….generally it’s better to tackle this before it’s a problem and approach the bank manager detailing what income is due…even though we don’t know when, and have a plan going forward as to what the requirements are and how they will be serviced. When it comes to the stewardship monies, you’re not alone as the banks will be hearing of these problems across the region.
It’s also worth mentioning that if your agreement is up for renewal or you are planning on starting a new agreement the first payment date alters depending on when your agreement starts. If your agreement starts between 1st January and 1st June you will receive your first payment by the autumn of the same year. If your agreement starts between 1st July and 1st December your first payment will fall in the autumn of the following year. Put quite simply if you have a 1st July start date you will not receive your first 6 monthly payment until over 12 months later. If you are able to, it would be sensible to try to have an agreement starting in the 1st half of the year.