ACRONYMS are commonplace in agriculture and this month we’ve a new and scary one to quickly get used to, writes Farmer columnist David Hall.

ATP or the Agricultural Transition Plan covers the transition period which starts in 2021 and runs to 2027, whereby Defra will reduce and eventually stop direct payments. This is probably one of the most significant changes to our industry in many of our lifetimes.

Defra plans to invest the money freed up by stopping direct payments, to support agriculture in different ways and by allowing the opportunity to access new schemes.

They say they will pay farmers to improve the environment, improve animal health and welfare and reduce carbon emissions. The ATP sets out the changes Defra will make and what these will mean to farmers, but be warned, it’s extremely scant on detail.

Critically, this is the first time the industry will has seen the first part of the profile to cut BPS payments to zero. The impact of doing this will be felt across the entire industry, but initially by larger claimants with a larger proportion of income from BPS and over time businesses that have little other business (non-farming) opportunities.

As income from BPS drops, cash flow pressures will increase and that will lead to many not investing and striping out non-essential spend, whilst some will seek to further improve efficiencies and productivity.

There is a concern that opportunities to re-invest in proposed new productivity measures will be financially prohibitive for farmers as those schemes require funding up front, which is often supported by current BPS payments. As they are reduced, so such investment becomes more challenging.

The NFU continues to be very concerned over this policy being implemented, largely in isolation from what our fu ture trading conditions are going to be like.Remember, we still do not have our future relationship with the EU finalised. It must also be noted that there is no consultation planned with the industry on the profile of cuts.

In summary, expecting our farmers to run viable, high-cost regulatory farm businesses, continue to produce food and increase their environmental delivery, while phasing out existing support and without a complete replacement scheme for almost three years is high risk and a very big ask.

There are also many uncertainties during this policy transition, not least the national recovery from Covid-19, and the global challenge of climate change. Moreover, the long-running price war in UK retail often sees farming and growing caught in the crossfire.

So, Ministers must bear these challenges in mind and use the transition period to address abuses of market power which not only damage farm businesses but also consumer choice and availability. They must also be mindful of the impact sudden drops in income could have, including seriously jeopardising the viability of a farm business and causing knock-on impacts for domestic food production.