British farmers are being offered a lump sum payment to leave the industry, but at what cost to UK agriculture?

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Agriculture is one of the oldest professions in the world. And in the UK, the people who farm are part of a rapidly aging workforce. Four out of ten British farmers are over 65, while the median age is 59.

To attract younger blood to the fields, the UK government is running a temporary scheme to lure some of these older professionals into retirement. The idea is that they can apply to receive a lump sum payment of up to £100,000, provided they sell their land, rent it out, give it away or plant trees on it.

This could allow new, younger and possibly more enterprising farmers to enter the sector as land becomes available. However, the scheme is not designed solely for new entrants: others may benefit from the opportunity to buy new land, including neighboring farms looking to expand or investors looking to diversify their portfolios.

On my family’s farm (and no doubt many others) the exit scheme, which we refer to as a “golden handshake,” is a hot topic. But my 69-year-old father, who owns a 250-acre farm in the West Yorkshire Highlands, isn’t tempted.

To begin with, he is confident that he will continue to receive government subsidies (albeit at a reduced rate), so he would not necessarily benefit financially from the exit scheme. Instead, he would pressure him to transfer the farm, perhaps prematurely. Estate succession is a long and complex process, and my father has no plans to retire any time soon.

Nor is he interested in doing anything else. She dropped out of school at age 14 to work on the family farm and has dedicated her life to it. He has never gone on vacation and would find it difficult, if not impossible, not to get involved if he were to transfer ownership.

But some farmers will gladly put away their wellies and accept the government’s offer in an increasingly challenging economic environment. Making a farm profitable is difficult for farmers across Europe, with 4 million closing between 2005 and 2015 (with knock-on damage to other businesses, including agricultural suppliers, machinery repair services and animal feed companies).

Recent figures show UK farms in hilly and mountainous areas earned an average annual income of just £15,500, less than half the national median wage.

That income is also influenced by events far beyond the farm gates, such as Brexit, COVID and the cost of living crisis. And the planned changes to farm subsidies may not work for everyone. Previously tied to EU policy, they are now being phased out in favor of new subsidies that will reward farmers for their efforts towards environmental sustainability.

That transition could be problematic for some. Previous attempts at similar schemes have often been a bureaucratic nightmare, with farmers facing payment delays and uncertainty.

So given the challenges of making money in agriculture, the global exit strategy will be tempting and could also bring benefits to the sector. If successful and freeing up land, young farmers can bring technological skills, entrepreneurial mindsets and business strategies that retiring farmers might have been reluctant to explore.

A fresh harvest?

It could also be an opportunity to see more women farmers enter the traditionally male-dominated sector. Some research suggests that women farmers have a more entrepreneurial outlook, which may be just what is needed to overcome the economic and environmental challenges of the sector.

But starting as a new farmer is not easy. Significant start-up capital is required and there are steep learning curves, particularly for those without an agricultural background. And the loss of large numbers of experienced farmers could result in significant social and cultural transformations, as well as the vital knowledge and experience they bring to British agriculture.

Indeed, established farmers engage in various activities that play an important role in shaping and valuing the countryside around them. It is also crucial that their traditional methods often involve local workers.

If too many older farmers leave the industry, traditional farming activities may decline. New entrants may prefer to use more profitable methods, invest in more efficient machinery and technology, increase productivity but also reduce labor requirements and therefore local jobs.

The future of the industry, and its role in the British economy, is impossible to predict. We still don’t know how many farmers will be lured away by the certainty of a balloon payment and retirement, and what impact their departure will have.

Those who stay, like my father, will do what they have always done and continue farming. They know what is on offer for those who want to leave. It is much less clear what will happen to those who remain.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The conversation

Peter Gittins does not work for, consult with, own stock in, or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond his academic position.

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