PR - A Case Based Analysis Evaluating The Financial Contribution To Farm Income Of Entry Level Environmental Stewardship On Upland Farms In England

The study is based on a detailed analysis of seven case study farms to assess the economic contribution of the Entry Level Scheme (ELS) to farm income. Theoretically agri-environment schemes should not make a positive contribution to farm income. On each case study farm the financial impact of participation in ELS was assessed using a conventional partial budgeting methodology. The actual income foregone figures from the case study farms were then compared with the theoretical figures produced by DEFRA. The study established that there is a substantial difference between the actual costs and income foregone and those assumed by DEFRA. The farms were therefore able to profit from their ELS agreements and it did make a positive contribution to farm income. The study raises important issues about the principles involved, in particular the use of actual and notional costs and the overlap between agri-environment requirements and voluntary unpaid measures undertaken by farmers ex ante. The study also addresses whether it is only those farmers who are able to profit who will enter the scheme.

Keywords: Entry Level Scheme (ELS), DEFRA, agri-environment requirements.