Written Evidence submitted by DJM Consulting (ELM0041)



Introduction To DJM Consulting

  1. DJM Consulting is a firm of rural business consultants. We advise a wide portfolio of clients including farmers, landowners and business managers across the West and East Midlands.


  1. We provide advice on the following matters, to help our clients to prosper:



• ‘The Bigger Picture Thinking’ – What are you trying to achieve?

• Non-Executive Director/Chairman – Independent View, Assist with implementation

• The ‘Third Eye’/Eagle’s View – Review of Current Position, Benchmarking, Annual Reviews


Business Management

• Financial/Management/Diversification/Technical Advice/Training/Farm Secretarial Services 


Land & Asset Enhancement

• Landlord & Tenant – Agricultural and Business Tenancies new and existing, Rent Reviews, Negotiations, Arbitration/Mediation

• Valuation, Taxation & Compensation – Capital Taxes, Informal and Red Book Valuations

• Planning/Land Opportunities – Opportunity Identification, Applications, Land Registry Matters


Green Money and Farming Schemes

• Renewable Energy/Energy Efficiency/Funding

• Basic Payment Scheme/Environmental Management/Woodland

• Grants


Conflict Avoidance & Advice

• Expert Witness/Probate Matters/Advice to avoid conflict/Mediation


  1. Our consultants are all from farming and rural backgrounds and are well equipped to understand the issues surrounding farming and rural businesses. We help farmers and rural business owners to run their businesses more effectively in order to achieve their aims and objectives. We provide flexible advice on a range of topics to meet specific needs and to help our clients’ businesses prosper.


  1. The author of this letter is a Senior Rural Business Consultant with over 10 years PQE as an RICS member (MRICS), a Fellow of the Association of Agricultural Valuers (FAAV) and a member of the British Institute of Agricultural Consultants (MBIAC).


  1. My day to day work and that of our firm involves environmental schemes and incorporating them into wider farm business strategy and development. I have had experience of helping farmers to design and enter Countryside Stewardship (CSS) – the first time round; Environmental Stewardship – ELS and HLS since its inception and more lately Countryside Stewardship (CS) Mid-Tier and Higher Tier and shorter-term schemes.


Question 2: Will the Sustainable Farming Incentive be a viable support measure for farmers before the full roll-out of ELM? Is further support required during the transition period?


The Sustainable Farming Incentive (SFI) could be a viable support measure if it provides sufficient funds to cover costs of compliance and an incentive payment over and above costs.


Some farmers will require further support because of the speed of which the basic payment scheme will reduce, having a direct impact on the bottom line and their businesses will be slow to react to this quick change.


Question 4: How can ELM be made an attractive business choice for farmers and land managers while effectively delivering its policy goals?


The financial reward must be there to incentivise participation. Positive environmental change needs to provides a higher economic return or provide other environmental or social benefits from which the farmer can make an additional financial return outside of ELM, above their current land use. There is a place for the income foregone method but at present they do not cover what they need to, to be an economic incentive for entry. ELM should not be afraid to go further with calculation approaches for the income foregone method.


Payments need to recognise the extra management costs incurred and low work rates for small plot work, which current schemes do not do. The additional costs incurred in the income foregone method are much higher on small plots than on field scale options, particularly if a field scale option can replace a crop in the arable rotation for example: using legume fallows as break crops instead of beans or oilseed rape.


ELMs need to be able to fit within the wider business model. Environmental schemes on farm need to be able to be designed so that they can be incorporated into wider farm business strategy and business development. All too often this is not easy for the farmer or business because of scheme design issues. ELM can resolve this quandary, to the benefit of the environment and the business together, as long as business needs are considered at the design stage.


ELMs should not be a standalone separate project within the context of the farming business. It needs to be considered an integral enterprise if it is to work on the ground and be an attractive business choice.


Question 5: How can the Government ensure that ELM agreements achieve their intended environmental outcomes, reduce bureaucratic burdens on farmers and deliver value for money?


       Enabling flexibility in delivery methods.

       Make good use of and support the use of technology to reduce bureaucratic burdens and measure outcomes.

       GPS programme compatible files should be used to draw up agreement maps so that the information once agreed can be transferred over to GPS in tractors etc. to enable accurate option drilling. Drones may assist with monitoring, allowing assessment of areas and measuring results, e.g. water retention in the soil.

       Do not penalise farmers for not succeeding when there is clear evidence that they have tried to meet the scheme’s requirements.


Question 6: What lessons should be learned from the successes and failures of previous schemes paying for environmental outcomes?


Payment timings and frequency need to be carefully considered and payments need to be made promptly. Timely cashflow is absolutely critical to successful business operations and the BPS reductions will have a huge impact on cashflow. Uptake by land managers of the ELM scheme will be much greater if land managers can have confidence in payments arriving on time and regularly. Payments under current schemes arrive far too late, often over 12 months after the work has been done. Making payments every month or every quarter for some options from the start of the agreement would help the financial position of agreement holders and is an example of how ELMS can add to business stability.  


Reimbursement for cost of production does not work.


Participation in previous schemes identified the below barriers that ELM should avoid through better design:

       Payment rates being too low

       Complicated, onerous application process

       Arbitrary option use limits on land use type, which limits environmental benefits and ‘switches farmers off’ – e.g. long list of options under current Countryside Stewardship (CS) and you can only choose from one because your farm is all permanent grass. Options limited purely to arable land use codes means no wild flower plots are being put into permanent grass in, despite there being quite an appetite amongst farmers for doing this.

       Knock on effect of non-compliance on other scheme income (may still be an issue after BPS has gone, if private schemes and public funds cannot be blended on same land)

       Fear of regulation and penalty application

       Lack of scheme flexibility in context of wider rural business

       Lack of understanding about the scheme – stops farmers and land managers ‘buying in’


Payments need to recognise the extra management costs incurred and low work rates for small plot work, which current schemes do not do. The additional costs incurred in the income foregone method are much higher on small plots than on field scale options, particularly if a field scale option can replace a crop in the arable rotation for example; using legume fallows as break crops instead of beans or oilseed rape.


Adoption of a simple formulae for payment like the following would solve this problem:


Payment equals = fixed charge + payment per ha


Fixed charge = payment for management, set up cost and lower work rate for smaller scale

Payment per ha = payment for the work carried out (incentive/profit payment)


Payment by results also needs a ‘base’ payment element to cover costs.


Payments will be based on measurements and data of some type or another. Farmers and land managers need to have confidence in the methods of measurement and they need to be applied universally.


The payment should be capable of adjustment at any time for ELM contracts with (say) 3 months’ notice. This allows the payment to be changed where farming practice changes or where targets for environmental options have been met.



ELM is a fabulous opportunity, welcomed by the industry. With the lessons on positive and negative aspects learned from previous scheme systems, it can be at the heart of the thriving land management economy.


The economic aspects of environmental management and impact on rural businesses must not be underestimated. Considering an environmental scheme in the context of the whole farming or rural business is the key to success.


I hope that you find these comments helpful.


February 2021